Excise Tax Act 2007







Act No. 6 of 2007

C
T

EXCISE TAX ACT 2007

Excise Tax Act 2007 Arrangement of Sections





Act No. 6 of 2007
to

Page 3



C
T

EXCISE TAX ACT 2007

Arrangement of Sections
Section

PART 1 - PRELIMINARY 5
1 Short title and commencement.........................................................................5
2 Interpretation....................................................................................................6

PART 2 - IMPOSITION, ASSESMENT AND PAYMENT OF
EXCISE TAX 7
3 Excise tax.........................................................................................................7
4 Imposition of excise tax ...................................................................................7
5 Debt to the Crown............................................................................................7
6 Timing of Liability...........................................................................................8
7 Liability for excise tax .....................................................................................8
8 Assessment of excise tax .................................................................................8

PART 3 - REFUNDS OF EXCISE TAX 8
9 Excise tax refund for raw materials .................................................................8
10 Refund of excise on re-exports ........................................................................9

PART 4 - LICENSING 9
11 License requirement.........................................................................................9
12 Application for license.....................................................................................9
13 Grant or refusal ................................................................................................9
14 Failure to obtain licence.................................................................................10
15 Revocation .....................................................................................................10

Arrangement of Sections Excise Tax Act 2007





Act No. 6 of 2007 Page 4
to



16 Crown responsibility ......................................................................................10
17 Assistance.......................................................................................................11
18 Records...........................................................................................................11
19 Licensed manufacturer’s liability...................................................................11
20 Unauthorised movement ................................................................................11

PART 5 - EXCISE STAMPS 11
21 Excise stamps .................................................................................................11
22 Printing of excise stamps................................................................................12

PART 6 - MISCELLANEOUS 12
23 Regulations.....................................................................................................12
24 Customs duty refund ......................................................................................12
25 Pre-existing contracts .....................................................................................12

Excise Tax Act 2007 Section 1





Act No. 6 of 2007
to

Page 5



C
T

EXCISE TAX ACT 2007

Act No. 6 of 2007

AN ACT TO PROVIDE FOR EXCISE TAX AND MATTERS
INCIDENTAL THERETO

I assent,
George Tupou V
14 August 2007

Commencement [not yet in force]

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

PART 1 - PRELIMINARY

1 Short title and commencement
(1) This Act may be cited as the Excise Tax Act 2007.

(2) This Act shall come into force on a date to be proclaimed by His Majesty
in Council which shall be the same day as the Customs and Excise
Management Act 2007 and the Customs Act 2007.

Section 2 Excise Tax Act 2007





Act No. 6 of 2007 Page 6
to



2 Interpretation
In this Act, unless the context otherwise requires —

“Chief Commissioner” means the Minister of Finance or the Treasurer;

“Customs” means the Customs and Trade Division of the Revenue
Services Department;

“Customs control” has the meaning ascribed to it in the Customs and
Excise Management Act 2007;

“Customs laws” means the Customs and Excise Management Act 2007,
Customs Act 2007 and this Act;

“Customs officer” means any person employed as a customs officer to
discharge any duty connected with the administration of customs laws;

“Customs security” means the securities authorised under Part 9 of the
Customs and Excise Management Act 2007;

“entered” has the meaning ascribed to it in the Customs and Excise
Management Act 2007;

“entry” in relation to the importation or manufacture means the lodging
of the prescribed declaration with Customs ;

“excisable goods” means goods imported into or manufactured in the
Kingdom which are liable to excise tax under this Act;

“excise tax” means the excise tax imposed by this Act;

“licensed manufacturer” means a person who is licensed under this Act
to manufacture excisable goods;

“manufacture” includes all processes in the manufacture of excisable
goods including —
(a) filtering, diluting or blending the excisable goods with other goods;
(b) putting the excisable goods for the first time into a container in

which they might be presented or from which they might be
dispensed; and

(c) labelling or marking, for the first time, of containers filled with the
excisable goods;

“manufactured” in respect of excisable goods, means excisable goods
manufactured in the Kingdom;”

“movement” in respect of excisable goods, means the point where the
goods are removed from Customs control;

“premises” includes any place, vehicle, ship or aircraft; and

Excise Tax Act 2007 Section 3





Act No. 6 of 2007
to

Page 7



“raw materials” means all goods and materials, which are used in the
manufacture of excisable goods; and

“specified premises” means the area approved for the purpose of
manufacturing excisable goods and includes an area approved for the
storage of manufactured excisable goods.

PART 2 - IMPOSITION, ASSESMENT AND PAYMENT OF
EXCISE TAX

3 Excise tax
(1) The Chief Commissioner shall, with the approval of His Majesty in

Council by Order —
(a) direct what shall be excisable goods;
(b) impose, revoke, suspend, reduce or increase excise tax on imported

and manufactured excisable goods; and
(c) provide for exemptions from excise tax.

(2) The Order under subsection (1) —
(a) shall comply with clause 19(b) of the Constitution; and
(b) may make different provision for different circumstances.

4 Imposition of excise tax
(1) Excise tax shall be levied on the movement of excisable goods.

(2) No excise tax shall be levied on the export of excisable goods.

5 Debt to the Crown
Excise tax imposed by this Act shall be —

(a) a debt payable to the Crown and recoverable by the Crown;
(b) payable to a Customs officer at the place where the Customs entry

form is received and processed by Customs; and
(c) payable in Tongan currency.

Section 6 Excise Tax Act 2007





Act No. 6 of 2007 Page 8
to



6 Timing of Liability
(1) An import of excisable goods shall occur on the date on which the

imported excisable goods are entered under the Customs and Excise
Management Act 2007.

(2) The liability for excise tax in respect of excisable goods manufactured in
the Kingdom, arises on movement of the goods from the specified
premises.

7 Liability for excise tax
(1) All importers shall pay excise tax prior to the movement of excisable

goods from Customs control.

(2) Licensed manufacturers shall pay excise tax prior to movement of
excisable goods from Customs control.

(3) The following shall, together with the respective entity, be jointly and
severally liable for excise tax due and payable by the respective entity —
(a) directors and chief executive officer of a company;
(b) the partners of a firm or partnership;
(c) the members of an association of persons;
(d) trustees of a trust; or
(e) members of any unincorporated body.

8 Assessment of excise tax
The excise tax payable by a licensed manufacturer in respect of the movement of
excisable goods shall be assessed by multiplying the appropriate excise tax rate
by the respective unit, weight or quantity of goods.

PART 3 - REFUNDS OF EXCISE TAX

9 Excise tax refund for raw materials
A licensed manufacturer who pays excise tax on imported excisable goods being
raw materials for the purpose of manufacturing excisable goods may apply to the
Chief Commissioner for a refund of such excise tax on the movement of the
manufactured excisable goods.

Excise Tax Act 2007 Section 10





Act No. 6 of 2007
to

Page 9



10 Refund of excise on re-exports
(1) Excise tax paid on imported excisable goods may be refunded on the re-

export of those imported goods or part thereof.

(2) Applications for refunds under sub-section (1) shall be made to the Chief
Commissioner on the prescribed form within 12 months from the date of
re-exportation.

(3) Any person who wilfully obtains any refund which is not payable
commits an offence and shall be liable upon conviction to a fine not
exceeding $10,000 or to a term of imprisonment not exceeding three
years, or both.

PART 4 - LICENSING

11 License requirement
A person shall not manufacture any excisable goods in the Kingdom unless
the person —

(a) is the holder of a valid license for manufacturing those excisable
goods on specified premises; and

(b) has given an acceptable Customs security to the Chief
Commissioner.

12 Application for license
(1) A person shall apply to the Chief Commissioner in the prescribed form for

a license to produce excisable goods at specified premises.

(2) The applicant shall —
(a) pay to the Chief Commissioner the prescribed application fee; and
(b) provide all information deemed necessary by the Chief

Commissioner including a description of any premises or part
thereof to be used as a storage area for excisable goods prior to
movement.

13 Grant or refusal
(1) The Chief Commissioner may grant or refuse a licence to manufacture

which shall be renewed annually, on receipt of an application for a licence
and any information requested under section 12.

Section 14 Excise Tax Act 2007





Act No. 6 of 2007 Page 10
to



(2) A licence granted under subsection (1) shall be in the prescribed form
subject to —
(a) such terms, conditions or restrictions as the Chief Commissioner

considers appropriate;
(b) the payment by the applicant of the prescribed licence fees; and
(c) the payment of the Customs security.

(3) The Chief Commissioner shall refuse an application if it does not comply
with the provisions of this Act.

14 Failure to obtain licence
(1) Notwithstanding sub-section (2), a person who has not been issued with a

licence as required under this Part, but manufactures excisable goods,
shall be liable for excise tax on all such excisable goods manufactured.

(2) Any person who manufactures excisable goods without a license commits
an offence and shall be liable upon conviction to a fine not exceeding
$100,000 or to a term of imprisonment not exceeding 10 years or both.

15 Revocation
(1) The Chief Commissioner may at any time revoke a licence to manufacture

where the licensed manufacturer does not comply with the conditions of
the licence.

(2) Where a licence is revoked under sub-section (1) the following may be
forfeited to the Crown —
(a) the Customs security; and
(b) all excisable goods on which excise tax is payable but not yet paid,

remaining in the specified premises seven days after the date of
revocation.

(3) Where a licence has expired, all excisable goods on which excise tax has
not been paid, remaining on the specified premises seven days after the
expiry date of the licence, shall be forfeited.

16 Crown responsibility
The Crown shall not be responsible for any loss or damage to excisable goods
stored in specified premises.

Excise Tax Act 2007 Section 17





Act No. 6 of 2007
to

Page 11



17 Assistance
The licensed manufacturer shall provide to Customs officers —

(a) all necessary assistance in performing any activity required by this
Act; and

(b) facilities required by them at the specified premises,

and any cost incurred shall be borne by the licensed manufacturer.

18 Records
(1) The licensed manufacturer shall maintain complete records to properly

account for all excisable goods manufactured and stored at the specified
premises.

(2) The licensed manufacturer shall make available to Customs officers on
request all records of excise goods manufactured, stored or moved into or
from the specified premises.

19 Licensed manufacturer’s liability
The licensed manufacturer is liable for the excise tax that would have been
payable on excisable goods but for which he is unable to account for.

20 Unauthorised movement
Excisable goods shall not be moved from the specified premises unless in
accordance with the Customs laws.

PART 5 - EXCISE STAMPS

21 Excise stamps
(1) The licensed manufacturer shall affix a prescribed excise stamp to

imported and manufactured excisable goods as prescribed prior to their
movement.

(2) Subject to subsection (1), any manufactured excisable goods which are —
(a) received for sale by any person; or
(b) placed on sale,

without the prescribed excise stamps having been so affixed, shall be
liable to seizure.

Section 22 Excise Tax Act 2007





Act No. 6 of 2007 Page 12
to



22 Printing of excise stamps
The Chief Commissioner may authorise the manufacture of excise stamps and
no person shall manufacture or print prescribed excise stamps without
such authority.

PART 6 - MISCELLANEOUS

23 Regulations
(1) The Chief Commissioner with the consent of Cabinet may make

Regulations required for the administration of this Act.

(2) Notwithstanding section 10 of the Acts Interpretation Act (CAP. 1)
regulations made under this Act may prescribe penalties for any offence
not exceeding a fine of $10,000 or imprisonment for three years, or both.

24 Customs duty refund
If —

(a) at the end of the last business day before commencement of this Act
a licensed manufacturer held excisable goods, being raw materials;

(b) those raw materials —
(i) were for use in the production of other excisable goods; or
(ii) had been used in the production of other excisable goods,

which were still in Customs control on the date of
commencement of this Act, whether under production or on
completion of production;

(c) the raw materials were acquired not more than four months before
the commencement of this Act; and

(d) the Chief Commissioner is satisfied that a licensed manufacturer
has paid Customs duty on the import of those raw materials
pursuant to Customs and Excise Act (CAP. 67),

then, on the movement of the excisable goods manufactured with those
raw materials, that person may apply for a refund of Customs duty shown
to have been paid on those raw materials.

25 Pre-existing contracts
(1) This section applies to a person manufacturing excisable goods before the

commencement of this Act.

Excise Tax Act 2007 Section 25





Act No. 6 of 2007
to

Page 13



(2) If a licensed manufacturer has entered into a contract to supply excisable
goods prior to the commencement of this Act, that person shall be entitled
to recover from the purchaser all excise tax payable on the excisable
goods supplied by that person pursuant to the contract, after the
commencement of this Act, and such excise tax shall be recoverable
notwithstanding that the contract contained no provision for the recovery
of such excise tax.

(3) Notwithstanding Part 4 of this Act, any person manufacturing excisable
goods before the commencement of this Act may continue to manufacture
excisable goods and shall be liable for the excise tax on such goods, but
shall apply for a licence under Part 4 within one month of commencement
of this Act.



Passed in the Legislative Assembly this day of 2007.