Committee silent on 7-year tax holiday to Fiji Water – Chaudhry

Fiji Labour Party leader, Mahendra Chaudhry says it is surprising that the 2023 Fiscal Review Committee which has submitted a range of taxation measures for the 2024/25 Budget, is silent on one of the most questionable measures of last year’s Budget – the 7-year tax holiday to Fiji Water.

He says the tax holiday granted to this extremely profitable foreign-owned company was widely questioned, and came as a slap on the face for the rest of the people who were lumped with a 15 percent VAT on all goods and services except for a few staple food items.

The FLP Leader says Government has not come up with any satisfactory explanation as to why Fiji Water received such exceptionally favourable treatment when local manufacturers had their corporate tax rate increased from 20 percent to 25 percent.

Chaudhry says if 2023 Fiscal Review Committee chairman, Richard Naidu, thinks that recommending the increase in water resource tax of 19.5 cents a litre (current) will mitigate against the unjustified tax holiday to Fiji Water, he is mistaken.

He says by all means increase the water resource tax; after all, the introduction of a water resource tax in 2007 was his policy initiative when he tried to impose 20 cents a litre resource tax on water and met with strong reaction against it by Fiji Water.

The FLP Leader says the 7-year tax holiday to Fiji Water is discriminatory and totally unjustified, and must be rescinded in the 2024/25 Budget.

He claims the local water bottling companies are on record as saying they have no objection to paying the corporate tax.

He adds the Airport Departure Tax is already quite high and should remain at the current $140.

Prime Minister Sitiveni Rabuka had earlier said the seven-year concession on corporate tax for the bottled water industry is to encourage new players who wish to enter the industry in Tailevu, Ra and Ba, and existing operators who wish to expand operations.

The Prime Minister said the revenue measures in the 2023/2024 Budget for the water bottling industry i.e. the water resource tax has increased to 19.5 cents per litre (an increase of 1.5c per litre) means that the company will pay more in taxes to the Fiji Revenue Customs Service.

He had said contrary to claims, the Fiji Water company is not exempted from paying taxes in Fiji under the 2023/2024 Budget revenue measures.

Deputy Prime Minister and Minister for Finance Professor Biman Prasad will deliver the 2024/2025 National Budget at 10am next Friday.