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Fiji announces biggest ever tax cut; ends licence regime

23
Jul '20
Pic: Shutterstock
Pic: Shutterstock
To brace for the 'new normal', the Government of Fiji has announced the country's biggest-ever tax cut –– a discount of hundreds of millions of dollars, with strategic incentives across age-old industries as well as new arenas –– such as manufacturing and assembly –– which other countries are looking to relocate to price competitive locales.

In his 2020-21 National Budget address, economy minister Aiyaz Sayed-Khaiyum said "when it comes to customs duties, we are building an entirely new tariff structure; one centred around simplicity and liberal trade, with a special focus on cutting costs for the tourism sector and making life more affordable for ordinary people."

Sayed-Khaiyum proposed massive duty reductions on goods that cannot be manufactured in the archipelago of more than 300 islands, with customs duties falling to five per cent, and zero per cent in some cases. "We’re eliminating the duty for all items under the Customs Tariffs Act 1986, which includes machinery, mechanical appliances and mechanical parts. That’s not all. We’re cutting customs duties on over 1,600 items (including life jackets)."

Overall, on more than 1,000 items duties are reduced to five per cent or zero per cent, and on more than 500 items, duty is decreased from 32 per cent to 15 per cent. The minister urged businesses to take advantage of "this duty-discount of the decade".

As for business-friendly measures announced in the COVID-19 Response Budget, the payment of advanced corporate taxes is now permanent. Further, the implementation of the VAT Monitoring System is now extended until January 1, 2022. The debt forgiveness provision is also extended to December 31, 2021 "to grant businesses another full calendar year of flexibility". 

In another major announcement, the minister said that August 1, 2020 will mark the end of Fiji’s business licence regime. "To start a business in the next financial year, you can complete an easy, online business incorporation and tax registration, then you’re in business –– it’s that simple. There’s no longer a need to fork out the money or the time it takes to obtain a business licence," Sayed-Khaiyum said in his budget speech.

The Textile, Clothing and Footwear Council (TCF Council) of Fiji termed the 2020-2021 National Budget as "bold, brave and absolutely necessary". TCF Council president Michael Towler said the budget supports the survival of businesses and industries which are also gearing towards recovery.

Fibre2Fashion News Desk (RKS)


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