‘Smart Borders for a Prosperous Tonga’ - Tax Week 2019 officially launched ^Featured

Acting Prime Minister Hon.Vuna Faka'otusia

Hon. Fa’otusia in his keynote address said Tonga is among the Pacific Island Countries that “probably has the most obese people in the world” and hopefully the newly launched report will assist Tonga.

“The Ministry of Custom and Revenue has been very instrumental in the fight against NCD using tariffs to raise cost of unhealthy food product and tobacco while simultaneously lowering the cost of healthy alternatives.’’

Minister for Revenue & Customs Hon. Tevita Lavemaau said this year’s theme is aligned with the ministry’s Strategic Development Framework of the Tonga Strategic Development Framework 2015 which emphasized a progressive Tonga for all.

“Tax is the most important revenue of the Government that is used to run all the important services of the Government, whereas border control is everyone’s business. The Ministry of Custom and Revenue, the Ministry of Police, Ministry of Health, churches, businesses and the people of Tonga have a role to play in the war of drugs.”

He also said that the ministry and law enforcement have been working to enhance inspection trainings and have an effective border management.

The weeklong event include various activities and poem competitions. It is also open for the public to ask any questions on tax collection and border control.

World Bank Report

The report is the first study of its kind to assess the impacts of taxations policy on tobacco, alcohol, food and beverage together in a comprehensive way, and it has generated a number of interesting findings and recommendations.

Following the government’s decision to use fiscal policy including taxes and subsidies as a mean to address Tonga’s NCD crisis in 2016 and upon the request of the government, the World Bank mobilized resources to provide technical assistance to research the impact of using taxation to address NCDs.

Liaison Officer on Behalf of the World Bank Group Office in Tonga Mrs. Natalia Latu said, “In the case of Tonga, and as per Tonga Strategic Development Framework aim of ‘a more progressive Tonga for all’, this underpins our investment in country.”

Senior Human Development Specialist from World Bank Dr. Sutayut Osornprasop, thanked the Government of Tonga for a great collaboration over the past two years to study the impacts of the innovative taxation policy.

He also presented the finding highlights from the reports:

• Over 76% of smokers have reduced the amount they smoke since the introduction of the excise taxes
• Demand for imported cigarettes has dropped by 68% since 2016
• Big tobacco tax raise is powerful enough to change the market share of the most popular cigarette brands
• More smokers from less well-off households reduced consumption of cigarettes, compared with the wealthier households
• People are consuming less alcohol and drinking less frequently, particularly in social drinkers
• People are changing what they eat in response to the increased taxes with decreases in the quantity of imported unhealthy foods like mutton flaps, turkey tails and ice cream
• Price is the reason for consumers to change their behaviors. This is consistent for all products – tobacco, alcohol and food.
• This does not mean that health education or other interventions are not important but it means that tax and pricing is one of the most powerful tools to change behaviors.

According to Dr. Osornprasop there are also rooms for improvement and recommendations. One of the recommendations is that the increased revenues from tax, particularly from food, provide the government more fiscal space that could allow it to expand multisectoral interventions to promote health of Tongan and healthy food more accessible.

“Co-organized with the Ministry of Revenue and Customs, Ministry of Health and partners, there will be a High-Level Policymakers Workshop in October 22 at Tanoa where we will go through the report recommendations in more details and to brainstorm among the high-level policymakers the way forward to apply findings and recommendations from the report into policy and implementation of multisectoral actions to promote healthy Tonga.”