The Foreign Exchange Levy (Amendment) Act 2016 (Act No.4 of 2016) was granted Royal Assent by His Majesty’s Privy Council on the 28 April 2016 and will be gazetted to be effective from 1st June 2016 to help Government finance its hosting responsibilities for the 2019 Pacific Games.
- The Foreign Exchange Levy legislation would establish funding proceeds to assist the Pacific Games preparations for the 2019 transnational event. The new legislation directs every financial institutions, banks, and money transfer operators to collect the levy from every purchase or sale of foreign currency in Tonga and pay to Government on a monthly basis. The levy shall be assessed and paid at the rate of ‘half a seniti of the spread’ on every one pa’anga value of every purchase and sale of foreign currency effective from 1st June 2016. Financial institutions are required to keep financial records of all foreign exchange purchases and sales; from these records, each financial institution is required to pay the collected levy with accompanying returns on a monthly basis either to the Ministry of Finance and National Planning or nominated account at various financial institutions.
- The Minister for Finance and National Planning Hon. ‘Aisake Eke stated that the ‘the proceeds from the levy is included in the 2016/17 budget and will assist Government finance its hosting responsibilities for the 2019 South Pacific Games as an important event for the Kingdom. This levy would be repealed at the end of Jun 2020 after the Games.“
- The Ministry of Finance and National Planning have conducted consultations with key stakeholders since April 2015 to help financial institutions and money transfer operators understand the objectives of the levy, how to apply and collect it properly.
Ministry of Finance and National Planning
12 May 2016.