VAT and Sales Tax in Tuvalu

Tuvalu does not impose a Value Added Tax (VAT), Goods and Services Tax (GST), or any general sales tax. This makes Tuvalu one of the few jurisdictions with no broad-based consumption tax.

No VAT / Sales Tax

Tuvalu has no VAT, no GST, and no general sales tax at the national level. There is no consumption tax added to goods or services at the point of sale. This applies to all transactions within the country.

Revenue Sources

Instead of a consumption tax, the Tuvalu government raises revenue primarily through:

• Personal income tax (progressive PIT 0-15-30%)
• Corporate tax (30% CIT or 1.5% turnover tax)
• Customs duties on imports (~10-15% average)
• Fishing license fees (major revenue source)
• Business license fees and administrative charges
• Remittances from Tuvaluans abroad

Import Duties

While there is no VAT, goods imported into Tuvalu are subject to customs duties and import taxes. These are collected at the border by the customs authority. The rates average approximately 10-15% depending on the type of goods.

Comparison with Other Countries

Most countries in the Pacific region and globally impose a VAT or sales tax. Tuvalu's absence of such a tax can be a competitive advantage:

• No VAT burden on consumer purchases
• Simpler compliance for businesses (no VAT returns)
• No input VAT recovery issues
• Lower effective prices for goods and services