THE Legislative Assembly of Tonga is adjourned until August 21st to allow Government’s submission of much needed amended legislations concerning the fund allocation towards sports.
This includes the Foreign Exchange Levy Act and the Taxation Incentive Act 2017.
The Foreign Exchange Levy legislation was passed in 2015 and amended in 2016 to collect half a seniti per pa’anga in every foreign exchange earnings. It was intended to help fund the 2019 Pacific Games. Yet it was raised in Parliament this is no longer the case.
Parliament was in turmoil last week after the former Finance Minister Dr. ‘Aisake Eke said the levy legislation and other laws concerning sports should be amended. He was convinced Government’s current practice of collecting levy on every foreign exchange earnings is illegal.
He said it is easy to amend the law and called for Government’s urgent action to address the matter.
In response the Hon. Minister of Inland Revenue and Customs Dr. Pohiva Tu’i’onetoa said Cabinet has approved a policy direction to amend the purpose of sports fund allocation in the budget. The modification is for the development of sports purposes instead.
Prior to that Tongatapu Number one Noble Representative Lord Vaea expressed his disappointment in Government’s continued in collecting levy yet Tonga is not hosting the PC Games.
Vaea said the practice is unlawful, yet Parliament allows it to happen. He therefore called if that is the case, then commercial banks should be allowed to make loans from the levy collection. However Dr. Eke reminded Parliament it is illegal to undertake that since the law specifically pointed out levy collection is for hosting of the 2019 Games.
On Monday, a call on Government was also made by ‘Eua Noble Representative Lord Nuku to consider allocating $7 million from fund allocation towards sports in the 17/18 budget for the development of rugby.
Dr. Eke also reminded the House, the levy collection was intended to help fund the Pacific Games. He said the 10 million fund allocation in the 2017/2018 budget towards sports is 5 million collections on foreign exchange levy and departure tax respectively.
He said its illicit and unfortunate for Parliament to start tapping into the 44 million allocation for sports yet modification to the legislations are yet made.
He said it is an easy job for the Government to take urgent action to address the issue.
Both the Vava’u Noble Representatives also shared the same sentiments. Lord Tu’i’afitu asserted it’s not for Cabinet to decide its policy direction on the sports fund allocation. Instead, it is for the Legislature to final on this matter since it is the taxpayers’ money.
Lord Tu’ilakepa Vava’u Number 2 Noble Representative repeatedly corrected the Justice Minister Hon. Vuna Fa’otusia that collection of levy is illegal and the process is carried out dishonestly.
The Justice Minister, Hon. Vuna Fa’otusia thought otherwise. He said the Government’s current practice is lawful as amendments are yet made. Therefore, he was convinced that levy collection is lawful and there was nothing wrong with the current process at the moment.
The Pacific Games 2019 Act was repealed in June by Parliament following Government announcement to withdraw Tonga’s bid to host the Games.
The Minister of Inland Revenue and Customs Hon. Dr. Pohiva Tu’i’onetoa apologized for the delay in submission of the much needed amendments. He clarified the amendments made to collect money to help with preparation of the Tonga sports team for the Pacific Games 2019.
He also reassured the House it will be tabled soon.
He also informed Parliament that Cabinet has approved to repeal the Taxation Incentive Act 2017.
The Speaker of Parliament Lord Tu’ivakano also pointed out that the Legislature is a lawmaking body, yet legislators take the lead in breaking the laws. He was convinced if the matter was taken to court, it is evident Government’s levy collection is unlawful.
He advised parliamentarians they should take the matter and their role seriously.
Vava’u 15 MP Samiu Vaipulu also queried Parliament when is it likely for Government to put a stop to this illegal practice. He further highlighted his primary concern when the House was deliberating on the national budget, it is illegal for Government to continue collecting levy and taxation for sports yet amendments to related laws on sports before the national budget is approved.
Lord Tu’ilakepa also proposed for the sports related laws to be further screened by the Ombudsman Office. Lord Nuku also supported the proposal for the Ombudsman Office to decide on the legality of the levy collection being undertaken by Government.
The Speaker corrected the Ombudsman Office have no jurisdiction to scrutinize the work of the Executive (Cabinet).
At the same time the Niua’s People Representative Fe’ao Vakata also asked Government that not only amendments to the law is needed but work plans as well on how the sports fund allocation be utilized.
The House is adjourned to August 21 to give more time for Government to submit the much needed pending amended bills.