Business has many reasons to be pleased with new Fiji Budget
Fiji based South Pacific Stock Exchange listed companies and multinational organisations setting up regional headquarters in Fiji will pay a lower rate of corporate tax, according to proposals in the new Fiji Budget released yesterday.<!--more-->
[caption id="attachment_4226" align="aligncenter" width="300" caption="Smartphones will be tariff free in Fiji from next year"]<a href="https://pacifictradeinvest.com/PTI/wp-content/uploads/2012/11/Smartphone-1.jpg"><img class="size-full wp-image-4226" title="Smartphone 1" src="https://pacifictradeinvest.com/PTI/wp-content/uploads/2012/11/Smartphone-1.jpg" alt="" width="300" height="200" /></a>[/caption]
Listed firms will now pay 18.5 per cent (the normal corporate tax rate is 20 per cent). Existing incentives will continue – dividends from shares of listed companies received by resident shareholders will continue to be tax exempt. Transnational business entities will pay just 17 per cent corporate tax.
In a bid to garner collectively bigger volumes of direct foreign investments from potential small business investors, the hitherto minimum requirement of $250,000 for foreign investment has been done away with.
New business friendly ICT initiatives have also been announced. ‘FijiPay’, a new ‘national switch’ will be deployed to facilitate easier and cheaper electronic transactions for businesses and consumers, which is expected to reduce electronic transaction fees.
‘Fiji Service’, Fiji Government’s new upgraded online portal will progressively allow access to a growing list of services starting mid-2013. Mobile service providers and consumers will both be pleased at the removal of all tariffs from touchscreen phones by January 2013. They will effectively be zero duty.
The Budget also proposes a new tax to discourage the use of fossil fuels. From next year, a user pays ‘green tax’ will be imposed on most fossil fuel except those use for cooking (such as kerosene). But public transport, particularly buses, will receive some rebates. Simultaneously, there will be incentives for renewable energy initiatives. For instance, duty concessions for the import of equipment for generating renewable energy will continue.
Meanwhile savings gained through increased power generation from renewable services will be passed on to consumers: Fiji’s monopoly power provider will drop unit prices by 5 cents across all tariff bands from next year. Some 60 per cent of Fiji’s electricity comes from renewable sources.
Among other highlights are the increase of the Personal Tax Income threshold from F$15,600 to F$16,000. Tourism Fiji will get $23.5m to promote Fiji tourism overseas.
Fiji's GDP growth is forecast at 2.5 per cent in 2012 and projected to be 2.7 per cent in 2013.