Tonga's Revenue Commission is flexing its muscles in the collection of overdue taxes, and recently three businesses have been forced to close their doors because of the non-payment of Consumption Tax.

Lepaola Vaea from the government's Revenue Services Department said that about 30% of businesses in Tonga have neither paid their CT nor made any contact with the department for months to talk about their problems, and others not at all since the introduction of CT in 2005.

"We don't like threatening people with the closure of their businesses, but we have to be fair to the 70% of businesses who abide by the law," she said.

Lepaolo also said that the public should accustom themselves with paying their dues, "before a completely new taxation system will be introduced sometime next year."

She said that the new taxation system had been passed by parliament, and her department was working on regulations, "then the new income tax system will come into force sometime next year."

Decline

Collecting government taxes will continue to be a difficult task in Tonga particularly as, according to a recent Asian Development Bank report, Tonga's economy has contracted by 3.5% during 2007.