The Fiji Institute of Accountants has today commended the National Budget 2020/2021, congratulated the government for delivering such a people and business-centric budget, and says Fiji is still well placed with the borrowing ratio.
FIA President Nitesh Lal says this is such a courageous budget.
Lal says the budget has taken into account the interests of the wide range of stakeholders and sets the right strategies towards our road to recovery from the catastrophic effects of COVID-19.
He says this is a well thought, broad-based budget which goes deep into the various sectors of our economy.
The Fiji Institute of Accountants President says the budget caters well for the people, the businesses and many sectors of our economy requiring assistance now.
Lal says business sectors will benefit from the large tax cuts and rebates, duty abolishment and reductions. He says a significant amount of incentives and opportunities are also available for investments in the construction sectors, medical and health services and sub-division projects.
He also says support to micro, small and medium businesses will continue through the highly concessionary loan packages.
Lal says for individuals there is no increase in PAYE, VAT and other taxes, and the $30,000 threshold for PAYE tax exemption remains.
The accountants also say there are great incentives for first home buyers and Fijians can directly benefit from the reduction in duties for white goods, motor vehicles and many other items.
Lal says it is now the responsibility of the traders to pass the benefit of these reductions to the market.
The Institute notes that a significant portion of the budget will be funded from external sources.
Lal says the borrowing is in line with the global trend and benchmarking with other well-developed countries as we are still well placed with the borrowing ratio.
The Institute says the government has announced that they will be borrowing at very concessional terms.
The net deficit for the 2020/2021 National Budget is $2 billion or 20.2 percent of GDP, a result of the total government revenue of $1.673 billion and total government expenditure of $3.674 billion.
The government’s total debt stock is estimated to be around $8.256 billion or 83.4 percent of GDP.
Government debt as at this month is forecast to reach $6.7 billion or 65.6 percent of GDP due to an increased borrowing limit in the 2019/2020 COVID-19 Response Budget to accommodate a higher deficit of 8.2 percent. The significant increase in debt to GDP is also attributed to the downward revision of nominal GDP given the massive economic contraction projected for this financial year.
Lal says they also note that the tourism sector has received the much needed assistance in this budgetary process and they encourage the government to continue to work and focus on other sectors in order to diversify our economy further.
He says they would also like to acknowledge Minister for Economy, Aiyaz Sayed-Khaiyum and his team for reviewing their submission, considering their input and its impact on the economy in moving the country forward.
The Institute says they look forward to working with relevant stakeholders and assisting where required to make our road to recovery from the economic effects of COVID-19 a smoother transition.
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