From the House, an English translation summary from the Tongan vernacular, by Pesi Fonua. Tonga Legislative Assembly, Minute No. 5, June 14, 2007.

- House final debate on Bills for Customs Duty and Excise Acts

Thursday June 14:

When the House opened after the lunch to resume its debate on Bills, the Minister of Justice was not present so there were proposals for the House to close down or to go into recess for 10 minutes, and wait for the Minister.

The Minister of Tourism proposed for the debate to proceed, he said they were there as law makers, and if there were things they could not deal with then defer those for the Minister. He did not think there were any complicated issues that they could not deal with, and some of the points raised so far were legally very shallow.

The Chairman called for a 10-minutes break.

Clive Edwards asked the Minister of Finance if it was true that Royal Beer was not paying tax.

The Chairman told the member that the Minister for Labour, Commerce and Industries would be bringing in some information on Royal Beer soon.

Clive on a different matter said that when sugar is imported to make beer, it is duty free, but sugar for home consumption is taxed.

The Minister of Finance said that Cane and Beet sugar are duty free.

20% flat rate for imports

Sunia Fili asked the Minister what were some of the community development projects that qualified for tax exemption.

The Minister said that only Charity projects qualified for tax exemption. He said that government wanted to introduce a 20% flat rate for all imported goods, and then introduce Excise Tax to compensate the loss from such an exercise.

'Uliti Uata said that Clause 19 (b) of the Constitution allows the Minister of Finance in Privy Council to set the rate for duty and taxes. He said that this was unfortunate because only the House should have the authority to set the rates for duties and taxes. He wondered why the authority was moved from the House to Government.

The Minister of Justice said that the speech by the member though impressive was incorrect. The authority is given to the Minister of Finance with the approval of the Privy Council.

'Uliti said that a Privy Council Decision no. 117 on November 1, 2006 allowed the producer of hard liquor an exemption from duty on their raw materials. He said that such a decision was illegal because the House in session and the House should have made such a decision.

Noble Tangipa wondered why the member did not take government to court if he thought it was illegal. He also thought that when members of parliament, the lawmakers, were pointing at each other for the breaking of the laws it does not look good.

'Uliti said he could not give the noble an explanation but he just wanted to point out how government was imposing duties and taxes at will.

The Deputy Prime Minister asked the member if he could tell him when did the government enforce tax without the approval of parliament. He said that the member was making unfounded comments.

The Minister of Tourism said that the interesting thing about the debate in the House is that while the problem at hand is that taxes have not been paid, some are asking for taxes to be terminated.

'Uliti responded that the tax-payers money financed government and pays the salary of the Minister.

The Minister of Tourism reminded the member that the salaries of all members of parliament were being paid by tax-payers.

Reminder

Noble Tangipa reminded members that they were in the House as lawmakers to open up opportunities for the people, not to accuse each other.

Noble Luani asked the Minister of Justice if a Bill to alter the rate of tax must first be passed by the House.

The Minister of Justice replied that under Clause 19 of the Constitution the Privy Council has the power to authorise the Minister of Finance to either introduce new taxes or to alter the rate of duties. The amendment and any new Bills must be presented to the House for its approval or rejected.

Clive Edwards said that the proper answer to the noble's question was that that when a legislation came from the Privy Council it is already an Act, but it can be cancelled or rejected by the House. He said that there was a case during the 1980s when government passed an Ordinance for an American to bring in bulldozers for the construction of the airport. The ordinance was passed while the House was in session, and it was illegal.

The Minister for Public Enterprises said that he was working at the Treasury at the time, and the ordinance was rejected by the House.

The Minister of Justice emphasised that the Privy Council can make Ordinances when the House is not in session.

Duty on vehicles

Clive asked the Minister of Finance, if an individual brings in a vehicle that he bought in an auction overseas at a very cheap rate. How would the duty be calculated?

The Minister of Finance said that the duty would be calculated based on price on the receipt. The same would be for a vehicle that is sent by a relative overseas to someone in Tonga.

The Chairman called for votes on a Bill for a Customs Duty Act. It was carried 21-0.

The proceedings continued with the Bill to amend the Excise Duty Act. The only amendment was to take away the words "King in Council", instead it should be only "Privy Council".

Votes

The Chairman called for votes and it was carried 24-0.

The committee proceeded with the Bill for an Act, repealing the Customs Duty Act.

The Chairman called for votes and it was carried 21-0.

A Bill to amend the Income Tax Act was read and it was passed with votes of 16-0.

The Committee was dissolved into Legislature and the Speaker took his chair.

The chairman of the Committee Noble Tu'ilakepa told the Speaker that the Committee had passed the bills for the Customs Duty Act, the Excise Duty Act, the Consumption Tax Act, and the Income Tax Act.

The Speaker called for the second and third reading of the Customs Duty Bill. It was carried in both readings by 23-0.



The remaining three Bills were carried in their second and third reading with an overwhelming majority.