The Revised Budget 2010: Facts and Figures

THE REVISED BUDGET 2010 (click here) should see slightly more revenue ($1.496 billion), slightly less expenditure ($1.715), and a reduced net deficit of $218.0 million or 3.5% of the nominal GDP at $6.188 billion. Local business seems to be happy according to Suva Chamber of Commerce president Dr Nur Ali.

The PM and Minister of Finance said $143 million had to be diverted from other purposes to meet the cost of two natural disasters ( Hurricanes Mike and Tomas), which struck Fiji within four months. He said unexpected costs were not likely to end there, The termite infection affecting the Lautoka area is also likely to be costly and there is an urgent need to dredge waterways like the Rewa.

He thinks the revised budget reflects the true position, creates transparency and will ensure accurate financial records and practices. At his recent meeting with the IMF, the IMF informed him that there was a failure of compliance with international best practices by previous administrations. He expects this will not be the case from now on.

CUTTING GOVERNMENT COSTS. Stressing the importance of agriculture and tourism to raise our export earnings, the PM listed the following measures taken to cut costs and speed economic recovery:
  • Commercial management of Government quarters and properties in the Central Division; 
  • Reform of Fiji Sugar Corporation has commenced; 
  • Reorganisation of the Government Supplies Department into the Fiji Procurement Office is underway and expected to by fully operational by September 2010; 
  • Water Authority is now fully operational with transfer of assets and liabilities to WAF from Water and Sewerage Department to be completed by August 2010; 
  • Reorganization of the FIMSA and the Quarantine Department into commercial statutory authorities to be completed this year; 
  • The Fiji Meteorological Services Department has been identified for reorganization with an assessment in train to determine the best option forward; 
  • Preparatory works have begun on the reorganization of the Fiji Electricity Authority (FEA);
  • Government is currently assessing proposals on public private collaboration regarding the management of Post Fiji. 
  • It is expected that Government Printing shall be available on the market within this year.
REVISED BUDGET HIGHLIGHTS 

Tariff Changes to encourage local production of vegetables, duty on all imported fresh vegetables will increase from 5% to 15%. The duty on shelled peas will be abolished. Duty on split peas, rice and tin fish was previously removed (following world commodity and food price increases) to help low income earners.

Social measures to assist poor. More assistance to the poor and near-poor; improved primary and maternal health care.

Revenue Measures to promote exports and import substitution. A raft of measures to promote exports and import substitution and local food production; help reduce fuel imports through lowered duty on fuel-efficient vehicles; broaden the revenue base; support the development of capital markets in Fiji and promote Fiji as a financial centre for the region and a strengthen compliance.

Direct Tax Measures to encourage investment. Dividends for companies listed on the South Pacific Stock Exchange will be treated as tax already paid. The corporate tax rate for these companies was recently reduced to 20%.

Indirect Tax Measures to raise revenue. VAT will be levied on General Insurance,except Medical, Term Life and Workers Compensation.

Motor Vehicles Measures to help fuel efficiency.To assist low and middle income earners in purchasing new fuel efficient motor vehicles, the fiscal duty on new motor cars and other passenger vehicles with capacity not exceeding 1500cc will be reduced from 32% to 15%
The age limit for used or reconditioned motor vehicles imports will be reduced from 8 to 5 years.

New Buses and Trucks t
o improve quality and safety
. The fiscal duty on new buses will be reduced from 32%to 5% and import excise  from 15% to 5%, a total of 10%. The fiscal duty on new trucks of of less than 3 tonnes will be reduced from 32 percent to 15 percent.

Jet skis Measures to help marine, water-based and tourist industries . To further Government’s policy of creating a tangible marine and water based industry and to create opportunities in the tourism sector, the duty rate for jetski’s will be reduced from 32% to 5%.Airport Departure Tax will increase from $75 to $100. Tourists spending over $500 already have VAT refunded.

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