A new formula for calculating customs duty on imported vehicles, based on the size of the engine, will encourage people in Tonga to buy newer vehicles, the government hopes.

Tonga's Customs Department will introduce the new formula for the calculation of Customs Duty on imported vehicles from April 30.

Lloyd Powell, the Head of the Customs Department, said that it was a government decision to allow a three-months transition period, starting on February 1, allowing the public to familiarise themselves with the new schedule.

From May 1, the calculation of the customs duty on vehicles will be based on the cubic centimetre or cc capacity of the engine of a vehicle and not on the cost, insurance and freight (CIF) value of a vehicle when it lands in Tonga.

The current rate of Customs Duty on all imported vehicles, old and new is 45%.

The new rate which will be calculated based on the cc capacity of the engine of a vehicle, will be $1.50 per cc for vehicles 1500cc and under, and $2 per cc for vehicles from 1500 to 30000cc, then from 30,000 upward will be $2.50 per cc.

The logic behind this move, he said, was to encourage people to buy new vehicles.

However, because Tonga is only a few weeks away from a Parliamentary election the new duty on imported vehicles has became an election issue, and a petition had been presented to Cabinet.

There was some speculation that the transition period may be extended beyond April 30, after the Information Unit published a Press Release last Friday, stating that the Crown Law and the Customs Department were preparing a Submission to be presented to Cabinet.

However, Lloyd said that he did not know anything about a submission.

A spokeswoman from Crown Law explained that they were working on the legal framework that Cabinet approved before the three-months transition period began at the beginning of February. She stressed that what they were working on was to make it possible for the new schedule to be introduced at the end of April.