MILITARY REVOKES TAX INCENTIVES

SUVA, Fiji (Fijilive, Dec. 31) – The military regime has withdrawn tax incentives for the Information Communication and Technology industry and [a] proposed increase in the income tax threshold.

It has also withdrawn a Value Added Tax (VAT) exemption on the surcharge portion of electricity charges for residential dwellings.

The ousted SDL multi-party government had announced in its 2007 Budget a 10-year tax holiday for companies moving to the ICT tax free zone at Kalabu. The Budget also proposed that these companies will get zero rating for sales to the local market and will be eligible for free fiscal duty for import of plant and duty.

It had also proposed increasing the income tax threshold from FJ$8,840 to FJ$10,000.

In a statement today, Finance Ministry acting chief executive officer Aisake Taito said that because of these policy changes by the military regime, total government revenue will be affected.

"It is therefore critical that the whole of the 2007 Government budget be reviewed in accordance with these new policy direction and recent economic developments," he said. "It is to ensure stability of Government finances in the short term and sustainability in the medium to longer term.

Taito said that in reviewing the 2007 Budget, his ministry hopes to align total Government expenditure to achieve a budget deficit target of two percent in 2007.

"The review will also ensure that Government refocuses expenditures to critical areas that can facilitate a quick recovery of Fiji's economy," he said.

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