ISSUES with SOLUTIONS
ISSUE NO. 1
- Better engagement with Local Private Sector in design and planning of the new e-Government
SOLUTION
- This will be addressed when the MOU is finalized and signed.
- Better engagement with Local Private Sector in design and planning of the new e-Government
SOLUTION
- This will be addressed when the MOU is finalized and signed.
ISSUE NO. 2
- Provide better support for services offered by the private sectors and stop making it hard for private sector to offer services to Government agencies. Fir example, MEIDECC is restricting Government Agencies from hosting email service with third party companies. They are quoting "National Security" and the Communication Act but there is no clear definition or policy of the security measures and compliance that needs to be in place. They are not even considering private suppliers to offer the service.
SOLUTION
- National Security Issue and until Gov't can have the mechanism to secure their system, outsourcing cannot be an option.
- Provide better support for services offered by the private sectors and stop making it hard for private sector to offer services to Government agencies. Fir example, MEIDECC is restricting Government Agencies from hosting email service with third party companies. They are quoting "National Security" and the Communication Act but there is no clear definition or policy of the security measures and compliance that needs to be in place. They are not even considering private suppliers to offer the service.
SOLUTION
- National Security Issue and until Gov't can have the mechanism to secure their system, outsourcing cannot be an option.
ISSUE NO. 3
- Duty on goods is way too high. The duty that is imposed on 1 container for him, can bring in 2 other containers. If Gov't lowers taxes, more will be bought into the country at a less cost. Good for people, good to move the economy out there.
SOLUTION
- There is an annual review of duty on imports, especially on health hazard goods (for which duty will be increased in July 2017). The business community may voice their concerns if they have valid reasons that the duty is too high on imports, but they have to be very specific on the rationales behind their concerns.
- Duty on goods is way too high. The duty that is imposed on 1 container for him, can bring in 2 other containers. If Gov't lowers taxes, more will be bought into the country at a less cost. Good for people, good to move the economy out there.
SOLUTION
- There is an annual review of duty on imports, especially on health hazard goods (for which duty will be increased in July 2017). The business community may voice their concerns if they have valid reasons that the duty is too high on imports, but they have to be very specific on the rationales behind their concerns.
ISSUE NO. 4
- The exchange rates used by customs for his last shipment. The rates they used on the Euro, they said was rates from Reserve Bank. The rates from BSP and ANZ was 1 Euro = 2.1 or 2.2 TOP, customs rate was 1 Euro = 3 TOP.
SOLUTION
- The exchange rate used by customs is the rate provided by NRBT (sometimes better than commercial Banks' rates). Rates used are monthly rates that cannot be changed.
- The exchange rates used by customs for his last shipment. The rates they used on the Euro, they said was rates from Reserve Bank. The rates from BSP and ANZ was 1 Euro = 2.1 or 2.2 TOP, customs rate was 1 Euro = 3 TOP.
SOLUTION
- The exchange rate used by customs is the rate provided by NRBT (sometimes better than commercial Banks' rates). Rates used are monthly rates that cannot be changed.
ISSUE NO. 5
- One thing that I think would make a massive different would be to increase the threshold for small businesses for tax purposes from $100K to $150K.
SOLUTION
- The SBT has only been in place for less that 3 years. MORC would require at least 3 years to put together their data, analyze the impact of their policy, and come up with changes needed going forward. Noting also that this means the CT threshold will have to be raised as well. It is a big change but can be put down as one of the Ministry's big projects for the coming FY (review of the SBT/CT threshold)
- One thing that I think would make a massive different would be to increase the threshold for small businesses for tax purposes from $100K to $150K.
SOLUTION
- The SBT has only been in place for less that 3 years. MORC would require at least 3 years to put together their data, analyze the impact of their policy, and come up with changes needed going forward. Noting also that this means the CT threshold will have to be raised as well. It is a big change but can be put down as one of the Ministry's big projects for the coming FY (review of the SBT/CT threshold)
ISSUE NO. 6
- Another alternative would be to have another category of taxes for the next range of businesses that are up to $150K at say 5% of turnover instead of CT registered because basically at that rate it would be a lot of businesses in that tax bracket just spend their whole income saving to pay that month's CT or in some cases last month's CT plus penalties.
SOLUTION
- Refer above, but recommendation will be taken into account when reviewing SBT and CT thresholds in the next FY.
- Another alternative would be to have another category of taxes for the next range of businesses that are up to $150K at say 5% of turnover instead of CT registered because basically at that rate it would be a lot of businesses in that tax bracket just spend their whole income saving to pay that month's CT or in some cases last month's CT plus penalties.
SOLUTION
- Refer above, but recommendation will be taken into account when reviewing SBT and CT thresholds in the next FY.
ISSUE NO. 7
- Lastly the process for business visa renewal that are foreign owned and have run to say 10 years or more should be simplified to basically just paying the fee especially when the people have had their citizen application (for Tongan citizenship) in for 3 or 4 years.
SOLUTION
- Applicants can apply for the renewal of their Business Visa for 2 years or more. Business & Employment Visas for 5 years will need to be submitted from the Principal Immigration Officer for approval. Notwithstanding the fact that this applicant has submitted a Naturalization Application, he/she will still need to hold a valid visa at all times until his/her Naturalization Application is finalized.
- Lastly the process for business visa renewal that are foreign owned and have run to say 10 years or more should be simplified to basically just paying the fee especially when the people have had their citizen application (for Tongan citizenship) in for 3 or 4 years.
SOLUTION
- Applicants can apply for the renewal of their Business Visa for 2 years or more. Business & Employment Visas for 5 years will need to be submitted from the Principal Immigration Officer for approval. Notwithstanding the fact that this applicant has submitted a Naturalization Application, he/she will still need to hold a valid visa at all times until his/her Naturalization Application is finalized.
ISSUE NO. 8
- There should be more initiates for businesses and homes to be able to produce solar power and feed a cheaper source of power back into the grid than purchasing diesel which uses up a lot of our income.
SOLUTION
- Refer to www.tongapower.to, Downloads for TPL's policies under "Small Distributed Generations"
- There should be more initiates for businesses and homes to be able to produce solar power and feed a cheaper source of power back into the grid than purchasing diesel which uses up a lot of our income.
SOLUTION
- Refer to www.tongapower.to, Downloads for TPL's policies under "Small Distributed Generations"
ISSUE NO. 9
- Business challenge: Noise Levels
How does a business, that is suffering loss of income due to loud noise from a competitor? receive support from Government?
Our business is shuffled from one ministry to another, namely Police and Tourism, because no ministry will assume responsibility. Though the Ministries we report to appear to be compassionate, little action is taken and no results are ever concluded. We are left alone.
Who is responsible?
Are there sound control laws?
If so, how does the Police pose to enforce them?
This is a growing problem. We are not the only business that suffers from uncontrolled sound levels.
Excessive volume of noise beats over our property and threatens our Tourism product of "A peaceful relaxing getaway" which our resort, has worked so hard to build for many years. This is totally unjust.
(note "A peaceful relaxing getaway" was visitors top reason to come to Tonga in the Min of Tourism 2016 statistic conducted at the airport over recent years.)
SOLUTION
- SG advised for complaints to be lodged to the Ministry of Police and they will conduct an investigation into the issue at hand.
Refer "Order in Public Places Act" Section 3, subsection g (iii).
When the law doesn't restrict then the "reasonable" principle applies. After 10:00pm, the noise is to be reduced to a reasonable level.
Note: Other concerns were raised by the private sector which the SG acknowledged as valid concerns. He suggested that the concerns are listed and submitted for Cabinet to consider, as they are responsible to amend the law.
- Business challenge: Noise Levels
How does a business, that is suffering loss of income due to loud noise from a competitor? receive support from Government?
Our business is shuffled from one ministry to another, namely Police and Tourism, because no ministry will assume responsibility. Though the Ministries we report to appear to be compassionate, little action is taken and no results are ever concluded. We are left alone.
Who is responsible?
Are there sound control laws?
If so, how does the Police pose to enforce them?
This is a growing problem. We are not the only business that suffers from uncontrolled sound levels.
Excessive volume of noise beats over our property and threatens our Tourism product of "A peaceful relaxing getaway" which our resort, has worked so hard to build for many years. This is totally unjust.
(note "A peaceful relaxing getaway" was visitors top reason to come to Tonga in the Min of Tourism 2016 statistic conducted at the airport over recent years.)
SOLUTION
- SG advised for complaints to be lodged to the Ministry of Police and they will conduct an investigation into the issue at hand.
Refer "Order in Public Places Act" Section 3, subsection g (iii).
When the law doesn't restrict then the "reasonable" principle applies. After 10:00pm, the noise is to be reduced to a reasonable level.
Note: Other concerns were raised by the private sector which the SG acknowledged as valid concerns. He suggested that the concerns are listed and submitted for Cabinet to consider, as they are responsible to amend the law.
ISSUE NO. 10
- My contribution to the next PPD... would be to urge Gov't of Tonga.. to get moving on the recommendations from TCCI... as made in the Report I presented at the last PPD!!!
SOLUTION
- Report to be circulated and discussed at the next PPD
- My contribution to the next PPD... would be to urge Gov't of Tonga.. to get moving on the recommendations from TCCI... as made in the Report I presented at the last PPD!!!
SOLUTION
- Report to be circulated and discussed at the next PPD
ISSUE NO. 11
- I am a resort owner out in Ha'apai. I am finding that a clearer job description for each Government department would be beneficial to my situation. Trying to get business licenses, whale watching license, liquor license, visas, etc., has been very difficult. Some departments seem to cross over with others. Some requirements seem to create a never ending circle.
My example is that immigration requires my whale guides to have my whale watching license attached to their applications before they will approve them. But these people can't take the whale guide course without a visa. These kinds of things are common and make things difficult for businesses to move forward.
SOLUTION
- TCCI is working on collating the information and making it available for businesses on the TCCI website. Various licenses and their requirements will be listed under each corresponding Ministry.
The business can attach the following to their employee's application for an Employment Visa:
- Copy of WW License; or
- Receipt of payment; or
- Letter of Reference from Tourism stating the business has submitted an application for a WW License.
- I am a resort owner out in Ha'apai. I am finding that a clearer job description for each Government department would be beneficial to my situation. Trying to get business licenses, whale watching license, liquor license, visas, etc., has been very difficult. Some departments seem to cross over with others. Some requirements seem to create a never ending circle.
My example is that immigration requires my whale guides to have my whale watching license attached to their applications before they will approve them. But these people can't take the whale guide course without a visa. These kinds of things are common and make things difficult for businesses to move forward.
SOLUTION
- TCCI is working on collating the information and making it available for businesses on the TCCI website. Various licenses and their requirements will be listed under each corresponding Ministry.
The business can attach the following to their employee's application for an Employment Visa:
- Copy of WW License; or
- Receipt of payment; or
- Letter of Reference from Tourism stating the business has submitted an application for a WW License.
ISSUE NO. 12
- A clear cut list of tasks for each department, which is then shared with the public (especially businesses) would be most helpful. Also, giving phone numbers for each department. Some departments do not have any phone numbers listed and often they don't answer emails. I am left with no answers and not knowing where to turn next.
SOLUTION
- TCCI website now has details of all Government Ministries, Public Enterprises and other organisations.
- A clear cut list of tasks for each department, which is then shared with the public (especially businesses) would be most helpful. Also, giving phone numbers for each department. Some departments do not have any phone numbers listed and often they don't answer emails. I am left with no answers and not knowing where to turn next.
SOLUTION
- TCCI website now has details of all Government Ministries, Public Enterprises and other organisations.
ISSUE NO. 13
- Legalization, new laws passed with no-consultation to private sector for view or thoughts. PAYE is a prime example of this, just been changed, not even aware they were doing this.
SOLUTION
- SG stated that the legal advice given to all Gov't Ministries is that consultation must be done with the public, especially those that will be affected, before all proposed Bills are enacted to be passed as law.
- Legalization, new laws passed with no-consultation to private sector for view or thoughts. PAYE is a prime example of this, just been changed, not even aware they were doing this.
SOLUTION
- SG stated that the legal advice given to all Gov't Ministries is that consultation must be done with the public, especially those that will be affected, before all proposed Bills are enacted to be passed as law.
ISSUE NO. 14
- Lack of clear direction from Government in its strategy, does one even exist?
SOLUTION
- TSDF to be on our website: send email with link to businesses for ease of reference.
- Lack of clear direction from Government in its strategy, does one even exist?
SOLUTION
- TSDF to be on our website: send email with link to businesses for ease of reference.
ISSUE NO. 15
Interference from Government in Banking sector, we are supposed to be governed by the NRBT, yet I understand the government constantly attempts to influence them. By the NRBT Act, Government is not supposed to interfere with the NRBT in any way.
SOLUTION
- The NRBT is an independent body from government and continues to maintain its autonomy. All policy decisions are finalised and approved by its Board of Directors (not by government) and are made with the intention of achieving not just one but all of the NRBT's objectives which are:
a. Maintain internal and external monetary stability;
b. Promote a sound and efficient financial system; and
c. Conduct its activities in a manner that supports macroeconomic stability and economic growth.
However, in order to achieve these objectives, the monetary policy set by the NRBT should work in tandem with the fiscal policy set by government to drive economic growth and macroeconomic stability. One does not dictate the other, but they should however work closely together. These are efforts of collaboration and not one of interference.
Interference from Government in Banking sector, we are supposed to be governed by the NRBT, yet I understand the government constantly attempts to influence them. By the NRBT Act, Government is not supposed to interfere with the NRBT in any way.
SOLUTION
- The NRBT is an independent body from government and continues to maintain its autonomy. All policy decisions are finalised and approved by its Board of Directors (not by government) and are made with the intention of achieving not just one but all of the NRBT's objectives which are:
a. Maintain internal and external monetary stability;
b. Promote a sound and efficient financial system; and
c. Conduct its activities in a manner that supports macroeconomic stability and economic growth.
However, in order to achieve these objectives, the monetary policy set by the NRBT should work in tandem with the fiscal policy set by government to drive economic growth and macroeconomic stability. One does not dictate the other, but they should however work closely together. These are efforts of collaboration and not one of interference.
ISSUE NO. 16
- Far too many import products in PLASTIC is storage around here in Tonga and it's still growing. This should be control.
SOLUTION
- Waste Authority is currently charging a 10% plastic levy on the importation of disposable plastic. This is charged on the CIF value.
- Far too many import products in PLASTIC is storage around here in Tonga and it's still growing. This should be control.
SOLUTION
- Waste Authority is currently charging a 10% plastic levy on the importation of disposable plastic. This is charged on the CIF value.
ISSUE NO. 17
- Government should help in getting overseas marketing for our local products.
SOLUTION
-
- Government should help in getting overseas marketing for our local products.
SOLUTION
-
ISSUE NO. 18
- Why our Tongan Pa'anga value are very low?
SOLUTION
- The current exchange rate policy was deemed appropriate by the latest mission from the International Monetary Fund. The Tongan Pa'anga is pegged to a basket of currencies. The movement in those currencies will dictate the strength of the Tongan Pa'anga. Most major currencies (USD, AUD, NZD) have appreciated greatly in recent years due to strong growths in those countries making our pa'anga weaker. This arrangement is still better than if we had let the market dictate the strength of the pa'anga (free-floating exchange rate) as Tonga's exports are weak and there is very little demand for the Tongan Pa'anga in the international market.
- Why our Tongan Pa'anga value are very low?
SOLUTION
- The current exchange rate policy was deemed appropriate by the latest mission from the International Monetary Fund. The Tongan Pa'anga is pegged to a basket of currencies. The movement in those currencies will dictate the strength of the Tongan Pa'anga. Most major currencies (USD, AUD, NZD) have appreciated greatly in recent years due to strong growths in those countries making our pa'anga weaker. This arrangement is still better than if we had let the market dictate the strength of the pa'anga (free-floating exchange rate) as Tonga's exports are weak and there is very little demand for the Tongan Pa'anga in the international market.
ISSUE NO. 19
- Saturation in market for retails & wholesale businesses - yet still new retail businesses starting up especially in villages as deemed to be 'reserved' for Tongans
SOLUTION
- There are currently no restrictions on location, however there is a condition that a shop can be relocated only once. Proof needs to be provided that the market is saturated.
- Saturation in market for retails & wholesale businesses - yet still new retail businesses starting up especially in villages as deemed to be 'reserved' for Tongans
SOLUTION
- There are currently no restrictions on location, however there is a condition that a shop can be relocated only once. Proof needs to be provided that the market is saturated.
ISSUE NO. 20
- Access to credit for stores, in order to buy and hold enough stock and attract customers.
SOLUTION
- Banks offer overdraft & working capital facilities, as well as trade loan/letter of credit facilities to allow customers to have higher levels of stock. However, Bank requires proof of the following:
- Capacity to repay
- Stock turnover ratio (this measures the store's ability to sell products over a period of time. A low ratio implies weak sales and therefore excess inventory)
- Debtor & Creditor Days (show how fast/slow you collect debts and pay bills)
- A clear Business Plan
- Access to credit for stores, in order to buy and hold enough stock and attract customers.
SOLUTION
- Banks offer overdraft & working capital facilities, as well as trade loan/letter of credit facilities to allow customers to have higher levels of stock. However, Bank requires proof of the following:
- Capacity to repay
- Stock turnover ratio (this measures the store's ability to sell products over a period of time. A low ratio implies weak sales and therefore excess inventory)
- Debtor & Creditor Days (show how fast/slow you collect debts and pay bills)
- A clear Business Plan
ISSUE NO. 21
- Lack of enforcing regulations: work permits not regulated & restricted to Tongans for low-skilled jobs, CT/PAYE/Income tax enforcement.
Food & Labelling requirements not consistent across food- grocery stores
SOLUTION
- At point of entry, customs seize all imports with no English labels.
- Lack of enforcing regulations: work permits not regulated & restricted to Tongans for low-skilled jobs, CT/PAYE/Income tax enforcement.
Food & Labelling requirements not consistent across food- grocery stores
SOLUTION
- At point of entry, customs seize all imports with no English labels.
ISSUE NO. 22
- CT to be reduced to 10% to ease cash flow & encourage compliance at the same time
SOLUTION
- This is one of the Ministry's main projects for the coming FY, although the rate is not yet confirmed.
- CT to be reduced to 10% to ease cash flow & encourage compliance at the same time
SOLUTION
- This is one of the Ministry's main projects for the coming FY, although the rate is not yet confirmed.
ISSUE NO. 23
- "Our biggest issue at the moment is that our major lines such as Flour, Milk, Butter which are the biggest contributors to our sales are under price control and therefore we have been only servicing the market but not making any money at all. Looking at the increasing expenses on daily basis and with the current competition level it's really getting difficult to operate the business. We request if the Ministry can re-look into the profit margins which are currently been given to us"
SOLUTION
- A review is tabled on the Consumer Protection & Fair Trading Division work plan for the next financial year (July 2017-June 2018) to be implemented in July-August this year. Ministry will advise on the outcome of the review.
- "Our biggest issue at the moment is that our major lines such as Flour, Milk, Butter which are the biggest contributors to our sales are under price control and therefore we have been only servicing the market but not making any money at all. Looking at the increasing expenses on daily basis and with the current competition level it's really getting difficult to operate the business. We request if the Ministry can re-look into the profit margins which are currently been given to us"
SOLUTION
- A review is tabled on the Consumer Protection & Fair Trading Division work plan for the next financial year (July 2017-June 2018) to be implemented in July-August this year. Ministry will advise on the outcome of the review.
ISSUE NO. 24
- Money Transfer Operators are constantly being told by Banks that they're in jeopardy of being closed down to meet Money Laundering requirements, even when they comply with all the requirements. Given that they are cheaper and faster, how can the NRBT help Money transfer operators to be authorized operators and conduct foreign exchange services?
SOLUTION
- De-Risking issues is not just a local issue but this is rather a global phenomenon. However, we have worked with MTOs, have conducted and will continue to liase with them on how to improve services. There are set guidelines established by the NRBT for any business to obtain a license for foreign exchange dealings. All they need to do is apply and fulfil those requirements.
- Money Transfer Operators are constantly being told by Banks that they're in jeopardy of being closed down to meet Money Laundering requirements, even when they comply with all the requirements. Given that they are cheaper and faster, how can the NRBT help Money transfer operators to be authorized operators and conduct foreign exchange services?
SOLUTION
- De-Risking issues is not just a local issue but this is rather a global phenomenon. However, we have worked with MTOs, have conducted and will continue to liase with them on how to improve services. There are set guidelines established by the NRBT for any business to obtain a license for foreign exchange dealings. All they need to do is apply and fulfil those requirements.
