"Revenue from the community
for the community"
Proposed Small Business Tax
9/10/2013 4:06:28 p.m.

The public are advised that the Government is proposing to amend the Income Tax Act 2007 by introducing a new taxing regime for small businesses (not companies) - that is businesses with an annual turnover of less than $100,000. Currently these businesses are taxed at 10% for chargeable income between $7,400 - $30,000, and 20% on the chargeable income of $30,001 and over. It is proposed that the new tax will be divided into 4 rates as follows –

·         Turnover $0 - $10,000 at $100 flat

·         Turnover $10,001 - $30,000 at $250 flat

·         Turnover $30,001 - $50,000 at $500 flat

·         Turnover $50,001 - $100,000 at 2%

 The reasons behind these proposed changes are–

1. To reduce the record keeping requirements for small businesses.

2. Small businesses will not need to file detailed tax returns.

3. Reduce the administrative costs of the Ministry devoted to small businesses.

4. To ensure equity Government is committed to ensure that the tax paid under the current system is not significantly different from the tax paid under the proposed rates.

Note that there will be an option to remain with the current income tax rates.

The Ministry welcomes all submissions, comments regarding these proposed changes to reach the Ministry no later than the 27th of March 2013. For enquires, contact Lepaola Vaea at lepaolab.vaea@revenue.gov.to, Teisa Pohiva at t_pohiva@revenue.gov.to or ‘Aisea Latu at alatu@revenue.gov.to. or telephone us at 23444, fax 25018 or visit our office at the Queen Salote Ex-Student Building, Railway Rd, Nuku’alofa.


Improving the lives of Tongans through effective & efficient tax & customs administration