Tonga - Politics, government, and taxation

Tonga is the only surviving kingdom in the Pacific. Its 1875 constitution is the oldest one in the Pacific islands, and although Tonga was a "protected state" of Great Britain from 1900 to 1970, most Tongans maintain that their country was never a colony. The current system of government is a hereditary constitutional monarchy, with King Taufa'ahau Tupou IV ruling since 1965. Beneath the monarch, there are 33 nobles, who control most of the land in the country. The nobility was established in the constitution of 1875 and is based on inheritance. The prime minister, deputy prime minister, and cabinet are appointed by the king from this group. The unicameral (single house) Legislative Assembly (Fale Alea) is made up of 30 seats, 12 of which are reserved for the cabinet appointed by the monarch, 9 are selected by the nobles, and another 9 are elected by popular vote of all citizens over the age of 21 years.

The most important political development in recent years has been the formation of a party called the Human Rights and Democracy Movement (HRDM). In 1994 the HRDM was formed under the leadership of 'Akilisi Pohiva; in the 1999 elections this party won 5 of the 9 "commoner" seats in the Assembly. The HRDM has advocated a broader democratic base and land reforms that would reduce the power of the nobles; for these activities, Pohiva and others have been jailed for short periods for "contempt of Parliament."

About 20 percent of GDP in 1994-95 was raised by taxation, and this accounts for nearly 70 percent of government revenue. Trade taxes are the most important, making up 68 percent of tax revenues, and this is almost equally split between customs duties and port and services taxes. Direct and indirect taxes each make up a further 14 percent of tax revenue. Personal income tax is set at 10 percent and corporate tax is typically around 30 percent. In each case there are many possible exemptions, so these taxes raise less revenue than they might.