KINGDOM OF TONGA

INCOME TAX AMENDMENT ACT
No. 4 of 1990

I assent,

TAUFA'AHAU TUPOU IV

12th July 1990

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AN ACT

TO AMEND THE INCOME TAX ACT 1976

[14th June, 1990]

BE IT ENACTED by the King and the Legislative Assembly of Tonga in the Legislature of Tonga of the Kingdom as follows:-

1. (1) This Act may he cited as The Income Tax (Amendment) Act, 1990.

(2) The Income Tax Act 1976, as amended, is in this Act referred to as the Principal Act.

2. Section 2 of the Principal Act is amended by inserting the following new definitions in the appropriate places:

"company headquarters in Tonga" means a company that:

(a) is registered under the Companies Act in the Kingdom;

(b) establishes its head office within the Kingdom;

(c) administers the operations of, inter alia, its overseas operations, or the overseas operations of a group of companies, from that head office; and

(d) conducts more than 80 per cent of its trade or business outside the Kingdom."

3. Paragraph (a) of Subsection (1) of Section 7 of the principal Act is amended by inserting after the words "making a profit" the words "with the exception of donations by a company up to T$1,000 for charitable purposes benefiting the Community."

4. Section 8 of the Principal Act is hereby amended by inserting the following new paragraph at the end thereof:

"(p) the income derived directly from farming and fishing up until 30 June 1995."

5. Subsection (1) of Section 24A of the Principal Act is amended by deleting the number "T$2,000" and in instead inserting "T$2,500".

6. Subsection (3) of Section 24A of time Principal Act is amended by inserting after the words "dependent parent" the words "provided that the total number of dependents does not exceed 5".

7. Section 25(2) of the principal Act is amended by deleting the number "T$500" and in its stead inserting "T$750".

8. Subsection (2) of Section 26A of the Principal Act is amended by deleting the words "exceed T$300" and replacing them with the words "exceed $1,000".

9. Subsection (1) of Section 26B of the Principal Act is deleted.

10. Part A of the First Schedule of the Principal Act is amended by inserting the following sub-paragraphs in paragraph 4:

"(c) in the case of a company headquarters as defined by this Act, be a rate of 10 seniti for every T$1 of taxable income."

11. Part B of the First Schedule of the Principal Act is hereby repealed and replaced by the following:

"PART B

ALLOWANCES FOR DEPENDENT REFERRED TO IN
PARAGRAPH 5 OF PART A

The rate of tax shall be 10 percent of chargeable income in excess of the allowances shown in the Table below.

Table

Number of dependents of the taxpayer	0	1	2	3	4	5	
	T($)	
Allowance for:							
daily wage 	10.00	11.40	12.80	14.20	15.60	17.00	
weekly salary 	48.08	54.81	61.54	68.27	75.00	81.73	
two weekly salary 	96.15	109.62	123.08	136.54	150.00	163.46	
half monthly salary 	104.17	118.75	133.33	147.92	162.50	177.08	
monthly salary 	208.33	237.50	266.67	295.83	325.00	354.17	

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Passed by the Legislative Assembly this 14 day of June, 1990