Joomla Login LightBox powered by WowJoomla.com

Written by MUTALAU

The Niue Legislative Assembly has passed the third reading of the Niue Consumption Tax Bill during the first week of February this year, making it one of the most important law for Niue.

The Niue consumption tax (NCT), which is equivalent to a goods services tax or value added tax in other countries will come into effect on 1 April 2009. The new tax will help Niue widen its tax base and getting more people to pay tax and contribute to the costs of providing infrastructure and services such as power, water and health services. Traditionally Niue's tax revenue is collected mainly from the salaries of the public servants, as over 80 percent of Niue's paid labour force works in the Government. However some concern was raised on some people especially in the private sector who have earn a lot but are not contributing a single cent to the cost of providing some of the public services and infrastructure in Niue.

The Niue Public Service Association (PSA), the union body of the public servants, is very concern with those that are suppose to be paying tax but not paying tax, and would like this tax reform to address this issue. As part of the tax reform, tax on income has also been lowered, 10% for up to $10, 000, 20% up to $20,000 and 30% above $20,000. Tax on secondary income now lowered to 10% from 35%, encouraging labour productivity. Import tax may also be reset to zero for most items except "sin" items like tobacco, alcohol and soft drinks. It is expected that a period of at least three years is may be needed to adjust and re-adjust tax policies to find a balance in ensuring that the Government is collecting sufficient revenue for its needs and so as to the consumers.

www.niuebusinessnews.com