Surprise 25% Tongan Ports Tariffs rise, no joke on April Fool's day [1]
Friday, April 1, 2005 - 18:15. Updated on Thursday, May 8, 2014 - 17:05.
While Tongan consumers were faced with a new 15% Consumption Tax coming into effect today, April 1, Tongan businesses were not amused by the sudden announcement by their Port Authority of a 25% increase in ports tariffs to take effect on April 4.
They warn that the increase in shipping tariffs will absorb any savings that were to be made from the Consumption Tax introduction.
Dr Sione Ngongo Kioa, the President of the Tonga Chamber of Commerce & Industries, said that the unexpected increase comes on top of a recent 20% increase in Ports operation charges, the Ports Authority made when it took over the operation of the wharf in October 2004. Ports tariffs cover things such as ship's berthage fees, terminal fees, anchorage fees, and wharfage.
"The shipping and marine industry was not informed of this new development until today, 31 March 2005," he said, although the Board of Directors of the Port Authority had approved the scheduled increase, which was gazetted on January 15, 2005.
In a letter of complaint addressed to the new Minister of Labour, Commerce & Industries, Hon. Dr Fred Sevele, Ngongo said the members of the Chamber, particularly the shipping companies, were asking the Minister to take table their complaints to government, "for further consultation."
"We propose to defer this increase for six to 12 months and review the amount of the increase as the Ports authority have already increased the ports opertion charges by 20%," he said.
"The advice was received on 31 March 2005 with a notice that the new policy will be implemented on 4 April 2005... The time given to shipping agents to discuss the new policy with their corresponding principals overseas is not practically and sensibly adequate," said Ngongo.
Consumption Tax
Beginning today April 1, the new Consumption Tax of 15% on most goods and services came into effect, replacing the old Sales Tax of 5% and Port and Services Tax of 20%.
Ngongo said the Chamber of Commerce was concerned about the impact of the new policy of increased port tariffs.
With the Consumption Tax, "the desired reduction in prices of imported goods due to the withdrawal of the Port and Services tax will be offset by this 25 percent increase in ports tariffs."
He said that not only will the frequency of overseas vessels visiting the harbour be affected, such as delaying shipments that will in turn affect the availability and supplies of imports, but the cost of sea transportation would increase to cover costs.
"Companies have to prove price reductions following the introduction of Consumption Tax in order to obtain the Ports & Service rebate. The resulting increase in shipping tariffs will confuse this issue and absorb the savings that were to be made for the Consumption Tax introduction," he said.