This week Deputy Prime Minister and Finance Minister Sir Terepai Maoate took a submission to cabinet to propose that the government go ahead with its original plan of doing away with the tax.
The government had announced early in the year that the planned exemption of the $15 tax for 2 to 12 year olds would be effective from Sept. 1.
However, on Sept. 1 there was an order issued by the executive council — the cabinet and the queen’s representative — for the tax to continue.
The last minute turnaround caused a stir in the local tourism industry, but that decision will now be reversed.
Financial Secretary Sholan Ivaiti had instructed his ministry to make the change on Sept. 1 because of concerns over plummeting government revenues.
The ministry asked that the tax be kept because it was worth an estimated $127,500 per year to government.
According to a media release from the office of the deputy prime minister, Maoate gave several reasons why the cabinet should rescind the decision made last week.
“It has taken over three months to have the original departure tax regime included in all the airline global destination systems,” stated the release. “Travel agencies all over the world use the GDS systems to make all their bookings and they are guided by the destination/departure tax/visa information etc which is contained within those systems.”
