Water Resource Tax to bring in more money for Govt

The government is expected to get a significantly higher level of revenue through the Water Resources Tax from next year.

In the 2011 National Budget announcement, the Water Resource Tax Rate will be 15 cents a litre for companies that extract more than 3.5 million litres of natural water.

The companies that extract less than 3.5 million litres have a Water Resource Tax of 0.11 cents a litre.

Based on the levels set, Natural Waters of Viti Limited which bottles Fiji Water is expected to pay the Water Resource Tax of 15 cents a litre since it extracts more than 3.5 million litres of water for production in a month.

The government said that Water Resource Taxes are expected to increase considerably from $0.5 million this year to $22.6 million next year.

It said this is due to the application of the newly revised tax rates for Water Resource Taxes in 2011.
 
Meanwhile, VAT collections for 2011 are expected to accumulate to $532 million, surpassing anticipated receipts for this year by $103.3 million or 24.1%.

This large variance is attributed mainly to the upward adjustment in the VAT rate from 12.5% to 15% in 2011.

The total VAT collections for 2009 amounted to $351.1 million and are forecast to stand at $428.7 million this year.

The Ministry of Finance said this is attributed to an increase in overall consumption spending this year.

The government also expects more revenue through the Hotel Turnover Tax.

It said anticipated receipts for Hotel Turnover Tax this year are expected to rise above 2009 collections by $1.5 million, reflecting the buoyant trends in visitor arrivals this year.

The trend is expected to continue in 2011 with Hotel Turnover Tax proceeds expected to increase further to $27.8 million.


Story by: Vijay Narayan