MINISTER OF FINANCE & CUSTOMS HON TEVITA LAVEMAAU

19 May 2020 The Minister of Finance Hon Tevita Lavemaau tabled into parliament the first deficit budget in the history of Tonga. That is a TOP$589.6 million deficit budget for the year 2020/21.

The same budget was announced through a press conference with the media hosted by the Minister of Finance, Finance CEO Mrs Balwyn Fa’otuisa, Revenue and Custome CEO Mr Kelemete Vahe, and DCEOs of Finance Lesieli Tufui Faletau, Toakase Palelei and Elizabeth Baker.

A total recurrent budget of $589.6 million is a reduction of 2 per cent from the current budget of $599.27 million for the year 2019/20 that will end on June 30th.

Hon Lavemaau stated that the deficit of $60 million in the recurrent budget for the year 2020/21 caused by the magnitude of the COVID-19, the destructive disasters of cyclone Harold and the commencement of principal loan repayment to China.

The ongoing battle against the pandemic COVID-19, the state of emergency and the closing down of the border affected the economies of Tonga particularly the business sectors, fisheries, tourism, agriculture and the remittances sent from the diasporic Tongans.

Government priorities for 2020/21 deficit budget

FINANCE CEO MRS BALWYN FA’OTUSIA

Finance CEO Mrs Balwyn Fa’otusia addressed seven government priorities for 2020/21 deficit budget.
1. Health – The importance of health particularly the combat against the COVID-19 and the noncommunicable disease (NCD) such as diabetes, high blood pressure, obesity and so forth.
2. Illegal drugs – To make sure that the fight against illegal drugs continues on.
3. Education – The quality of education and health are so significant.
4. Economic development – Especially the development in agriculture, fisheries, and tourism.
5. Infrastructure – Including the road infrastructure and the infrastructure from cyclone Gita and Harold such as the building of houses and wharves.
6. MEIDECC – The importance of environmental change, solar energy and climate change.
7. Public sectors’ reforms – Government change into electronic systems.

The deficit in collecting revenue and customs

REVENUE & CUSTOMS CEO MR KELEMETE VAHE

The Revenue and Customs CEO Mr Kelemete Vahe shed light on how the government faced a deficit budget while loss revenues from taxes, duty and CT in allowing businesses to delay their taxes until June.

The government lost an estimated value of $63 million up to April by allowing of imported goods for education, agriculture, fisheries, tourism, and communities development not to pay duty and CT.

The government should collect nearly $700,000 from the essential goods for the family but opted to help people not to pay duty or CT as part of the combat against COVID-19.

It is estimated that if the duty-free for essential goods for family extended until December than an approximate lost revenue of $3.2 million that the government should collect from the customs.

Mr Vahe concluded by saying that if the government decided to extent for a longer period of time and not to pay duty and CT for family’s essential goods, an estimated of $40 million loss of revenue that the government will face.

That is the amount of money that the government committed to helping people without collecting it from them.

Government solution for the $60 million deficit:

Finance DCEO Mrs Toakase Palelei reaffirmed what the Minister of Finance stated by saying that these are government’s solution for the $60 million deficit.
1. $20.45 million from the issue of government’s bond
2. $19 million – low-interest loan from IMF
3. $20.55 million from government’s reserve

Mrs Palelei told reporters that the current financial year, an approximated deficit of $35 million in revenue and an estimated deficit of $15 million.

The government’s revenue will continue to be affected by COVID-19. For instance, the overseas aid for the recurrent budget is reduced by 12 per cent. It is estimated that a deficit of $40 million in revenue for the recurrent budget 2020/21.

The budget support of $38 million and the Government of Tonga will continue in working together and negotiate with other developed countries in supporting our budget and development.

Overall, the government solution for $60 million budget deficit is only there for the parliament to legally approve and reserve to protect us. If the financial situation change then we do not need to loan from the IMF, said Balwyn Fa’otusia.

KOE PATISETI FE’AMOKAKI KI HE TA’U FAKAPA’ANGA 2020/21 TOP$589.6 MILIONA Koe hono ‘oatu konga lalahi ‘eni ‘o e Patiseti Fe’amokakai $589.6 miliona ki he ta’u fakapa’anga 2020/21. Koe fe’amokaki $60 miliona ko ‘eni na’e makatu’unga ia mei he fu’u uesia ‘ehe COVID-19 ki he fonua moe ‘ekonomika pehe ki he uesia ‘o saikolone Haloti pea moe kamata totongi fakafoki koia ‘etau no (loan) ki Siaina. Koe uesia ‘o COVID-19 mei hono tapuni koia e kau’afonua pehe ki he fakataputapui ‘o e state of emergency ‘aia ‘oku uesia lahi ai ngaahi pisinisi, ngoue, toutai etc.NGAAHI TAUMU’A NGAUE MOE VISONE ‘O E PATISETI

  1. Mo’ui – COVID-19 moe ngaahi mahaki ‘ikai pipihi (NCD)
  2. Faito’o konatapu
  3. Ako
  4. Langa faka’ekonomika
  5. Langa fakalakalaka eg. ngaahi hala, langa fale, uafu etc.
  6. Ma’u’anga ivi, Feliliuaki ‘Ea moe Fakatamaki fakaenatula
  7. Ngaahi liliu Public sector – ngaue faka’elekitulonika

PALOPALEMA FEPAKI MOE TANAKI PA’ANGA

  • Toloi totongi tukuhau ngaahi pisinisi ki Sune tukukehe PAYE ‘oku osi tokoni pe ia ki he ngaahi pisinisi
  • Tonounou Epeleli, Me mo Sune peseti 7%
  • To’o tute moe CT ki he ako, ngoue, toutai, takimamata, ngaahi me’a fakakolo. A’u mai ki ‘Epeleli ‘oku mole ai $63 miliona ‘ikai ke tanaki he Pule’anga pea ‘oku fakafuofua ‘e a’u pe ki he $100 miliona.
  • Ngaahi me’a tokoni ki he famili, naunau haisini moe naunau fakama’a ‘api. Ko ‘ene a’u mai ki ‘Epeleli ‘oku ofi he pa’anga fitukilu ‘oku ‘ikai tanaki he Pule’anga. Ka toe fakaloloa atu ki Tisema ‘e ‘ihe $3.2 miliona. Ka toe fakaloloa atu ‘e a’u pe ki he $40 miliona.

Koe ngaahi pa’anga ‘eni na’e totonu ke tanaki he pule’anga ka ‘oku nau fili ke ‘oua tanaki kae tuku ke tokoni’i ‘aki kakai fonua koe ‘uhi koe COVID-19. KOE SOLUSIO KI HE $60 MILIONA FE’AMOKAKIKoe pa’anga ‘e $60 miliona fe’amokaki ko ‘eni ‘e malava e Pule’anga ke tokateu kiai ‘okapau e tali ‘ehe Falealea ke hoko koe lao.

  1. $20.45 miliona mei hono tukuatu kitu’a ngaahi ponite ‘a e Pule’anga.
  2. $19 miliona koe no peseti ma’ulalo mei he IMF
  3. $20.55 milion mei he pa’anga talifaki e Pule’anga

Koe tokateu pe ‘eni ‘a e Pule’anga ‘oka fiema’u pea ka a’u e tu’unga fakapa’anga ia ‘o ma’u ha tupu pea he’ikai leva fiema’u ia ke ngaue’aki e solusio ko ‘eni. ©VPON Media Online 2020

©VPON Media Online 2020