Government hopes new budget will make lives better for poorest Tongans

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Prime Minister ;Akilisi Pōhiva. Photo/Kalino Lātū

Better paid Tongans will pay more taxes as part of the government’s move to make life easier for poorer Tongans.

The government’s plans are aimed at raising the buying power of lower income earners and generating more revenue from taxes.

The tax-free threshold on PAYE will also be increased.

Higher income earners will pay more tax.

The budget statement 2017 – 2018 said growth and sustainable development were critical to the government’s plans  to alleviate poverty and hardship.

The government has approved an increase in the monthly social benefit payments for the elderly and persons with disability.

Disabled people and those aged 70 and over currently receive $TP65 a  month.

The government has already moved to ease the cost of electricity for low income earners through to consumers with the introduction of the Life Line Tariff subsidy scheme in April.

This is designed to cushion the effect of rising oil prices on the generation of electricity and subsequent costs to consumers.

In the long term it is anticipated the electricity costs will fall as the kingdom moves towards more power being generated by solar energy, wind and hydro-electric power.

The Tongan government has been working with the World Bank on a feasibility study for a Poverty Alleviation Scheme.

Preliminary work started in April 2016 and was expected to completed by last month.

The main points

  • Better paid Tongans will pay more taxes as part of the government’s move to make life easier for poorer Tongans.
  • The government’s plans are aimed at raising the buying power of lower income earners and generating more revenue from taxes.
  • The government has approved an increase in the monthly social benefit payment for the elderly and persons with disability.

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