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46-fold tax increase too much for Fiji Water company

By Campbell Cooney MELBOURNE, Australia (Radio Australia, Nov. 28, 2010) - Fiji's biggest bottled water producer, Fiji Water has announced it will close its operations in the country.

In a statement, the company's president, John Cochran, says the closure is in response to a new 15 cent per litre tax, imposed on facilities which extract more than 3.5 million liters per month.

Fiji Water previously paid just 0.33 of a cent per liter in tax.

[PIR editor’s note: 15 cents is a 46-fold increase in the .33 cent rate.]

Mr. Cochran says the tax is "untenable", and has left the firm with little choice but to close its facility in Fiji.

He says Fiji Water is the only company affected by the new tax increase.

Earlier this month, the company's external director, David Roth, was deported back to the United States for allegedly interfering in Fiji's internal affairs.

[PIR editor’s note: An earlier report from Fijivillage states the Permanent Secretary for Information, Sharon Smith-Johns, has reassured public that the David Roth issue was between Roth and the government and not against Fiji Water. Commodore Bainimarama commented on the issue saying "non citizens of Fiji, who interfere in the internal affairs of Fiji, breach the conditions of their work permit. He said it is unfortunate that David Roth saw it fit to engage in activities outside of his work permit conditions."]

Mr. Cochran says the closure of the company will have serious implications for Fiji.

"We represent more than FJ$130 million [US$69 million] in export revenue for the country and employ nearly 400 Fijians at our facility," he said.

"We currently pay millions of dollars in duties and income tax. We also contribute over FJ$1.8 million [US$956,000] annually in royalty payments to the Yaqara Pastoral Company Limited and another FJ$250,000 [US$133,000] annually to a trust that supports the six local villages surrounding our facility."

Mr. Cochran says the move means the Fijian government is effectively "taking our business", and says it "sends and clear and unmistakable message to businesses operating in Fiji or looking to invest there".

"The country is increasingly unstable, and is becoming a very risky place in which to invest," he said, adding however that the firm is willing to work with the government on the issue and says it may continue operating in Fiji if talks produce a satisfactory outcome.

But Fiji's interim Prime Minister Commodore Frank Bainimarama says the closure shows the US company does not care about his country or its people.

He says the company is just unhappy about paying what he calls a fair tax, pointing out that Fiji Water received significant tax breaks until two years ago.

Commodore Bainimarama has also rejected the claim his country is unstable.

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