LAWS OF TONGA

ORDER-IN-COUNCIL

GS 4C of 2005

CONSUMPTION TAX ACT 2003

In exercise of the powers conferred by section 5(3)(a) of the Consumption Tax Act 2003, the Chief Commissioner of Revenue, with the consent of Privy Council, makes the following Order: 

1. The following supplies shall be exempt from consumption tax— 

(a). medical prescription, dental, nursing or health services; 

(b). education services; 

(c). financial services; 

(d). public transport services; 

(e). lease of land for residential purposes. 

2. The following taxable supplies shall be subject to a zero rate of consumption tax— 

(a). an export of goods; 

(b). an export of services supply for use outside Tonga; 

(c). a supply of international transport of goods or passengers services from a place outside Tonga to another place or if the transport or part of the transport is across the territory of Tonga; 

(d). the supply of goods as part of the transfer of part or whole of a business as a going concern by a registered person to another registered person, provided that the supplier and recipient have— 

(i). agreed in writing that part or whole of the business is supplied as a going concern; and 

(ii). notifies the Chief Commissioner, in writing, of the details of the transfer, at the date of the transfer on which consumption tax has been credited as input tax; 

(e). electricity supplied by any supplier for domestic purposes; and 

(f). the first 20 cubic meters of water per month supplied by any supplier for domestic purposes. 

3. The following shall be exempt from consumption tax— 

(a). imports which if supplied in Tonga would be an exempt supply under Order 1; 

(b). imports not exceeding $500 in value accompanying a person arriving in Tonga; or 

(c). imports by diplomats according to law. 

Made at Nuku‘alofa this 11th day of March, 2005. 

Chief Commissioner of Revenue.