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Fiji Time: 20:24, Friday 18th Apr 2014
Untitled Document
National Budget 2011

 

2011 National Budget Announced - Nov 26

Aiyaz Sayed-Khaiyum
Acting Finance Minister Aiyaz Sayed-Khaiyum

The price of goods and services which are not VAT exempt under the current policy structure will increase by 2.5% from the 1st of January next year after the government announced that VAT will increase from 12.5% to 15%.

The VAT exempt items under the current policy include the selected basic food items and pharmaceutical products.

Acting Finance Minister Aiyaz Sayed-Khaiyum made the announcement during the 2011 National Budget address in the last hour, he has also announced targeted assistance to the needy in society and at the same time has announced a number of capital projects through increased capital expenditure.

Sayed-Khaiyum said the VAT increase is necessary to meet the government’s debt repayments but at the same time he said other measures are in place to cushion the blow on the people.

Looking at other price increases:

There will be an increase in fiscal duty from 15% to 32% for all fresh and chilled vegetables and fruit juices.

In addition to the duty, a 10% import excise tax has been imposed for fresh and chilled vegetables.

The price of cigarettes, tobacco and alcohol will also increase as fiscal duty has been increased by 3%.

In addition to this, local excise tax rates have also increased for cigarettes and alcohol by another 3%.

New and increased excise tax rates have been announced for beer, spirit and wine.

We will get you the new prices as they come to hand.

Prices for imported snacks and confectionaries will also go up after the imposition of a 15% import excise tax while import excise tax has been increased from 10% to 15% for water, including natural or artificial mineral water.

A 15% import excise tax has also been imposed on tube lights and bulbs.

Fiscal duty will also be increased from 5% to 32% for mops while duty for used or reconditioned heavy machinery will be reduced from 32% to 15%.

There is also a reduction in duty from 32% to 15% for new passenger motor vehicles not exceeding 2500cc and duty reduction from 32% to 5% for smart phones which are high end mobile phones.

The importation of non-biodegradable plastics will be banned and local manufacturers of non-biodegradable plastics will be given 6 months to adjust production.

The government has allocated $7.5 million to ensure that the $30 Food Voucher Program which started this year under the Ministry of Social Welfare continues.

23,000 people benefitted through the programme this year.

Sayed-Khaiyum said those people under the Poverty Alleviation Programme will continue to receive aid with an additional allocation of $3.6 million in the 2011 National Budget for 10,000 new food voucher recipients.

These new recipients will include the elderly over 70 years old, pregnant women who have no other source of help and disadvantaged families.

In education, the bus fare assistance for students will continue with an allocation of $12 million.

Also, $18.3 million is allocated for tuition fees and text book assistance for next year.

The government has stressed the importance of primary health care in the country where grass root programs will be revitalized and implemented.

$1.7 million has been allocated to construct Health Centres in Nayavu, Nasavu, Qamea and Kashmir in Lautoka.

Three mortuaries will be constructed next year in Balevuto, Mokani and Tukavesi and all 19 sub-divisional health centres will be provided ultra-sound and x-ray facilities.

The CWM Hospital in Suva is currently undergoing a major facelift.

Sayed-Khaiyum revealed that government has allocated $2 million for the purchase of a full body scanner called the "Magnetic Resonance Imaging" machine or (MRI), as well as a CAT scanner.

He added that it used to be past practice where people needing urgent scans would have to travel abroad however, this will be a thing of the past, adding that Fiji will also become a regional hub as other Pacific islanders will be coming to Fiji for treatment as well.

CAT scanners have also been installed in the Lautoka and Labasa hospitals.

The Water Authority of Fiji has been allocated $77 million for the completion of various capital projects next year.

This includes the upgrading of water and sewerage supply between Suva/Nausori, Nadi/Lautoka, Sigatoka and in Labasa so there are high hopes that these works will improve water supply in the country.

A total of $11.4 million has been set aside by government for the maintenance and upgrade of roads around Viti Levu.

In the National Budget address this morning, Acting Finance Minister Aiyaz Sayed-Khaiyum said that this money will be used for the Suva-Nausori corridor, as well as the Ratu Dovi Road where four lanes are currently being done up to the Laqere Bridge.

He added that the works are currently underway and will continue next year.

The government has now taken an active role to ensure the viability of the sugar industry.

Acting Finance Minster Aiyaz Sayed-Khaiyum said that government has been approached by FSC’s creditors to settle borrowing that was guaranteed by the government.

Sayed-Khaiyum said the government is committed to salvaging the sugar industry as more than 200,000 people or 20% of the country’s population depends on it for their livelihood.

A total of $123 million has been allocated to support the sugar industry.

$110 million has been provided to the Fiji Sugar Corporation, $6 million has been allocated for cane replanting next year, and $1 million has been given for quality cane payment.

$5 million has been allocated to the South Pacific Fertilizers Company while another $1.5 million will be given to the committee on the better utilization of land.

Government has allocated $4.5 million in next year’s budget to construct a new remand cell in Korovou.

Sayed-Khaiyum said this will address the overcrowding issue in our remand cells.

FICAC has been allocated $7.9 million to continue fighting corruption in the country.

The Fiji Police Force has been allocated $76.95 million and it has been confirmed that through the government’s vehicle leasing programme, the force will have its full complement of vehicles next year.

Police Commissioner Brigadier General Iowane Naivalurua refused to make any comments on the Police budget.

The military budget for 2011 is $108 million compared to the revised military budget estimate of $100 million this year.

Acting Finance Minister Aiyaz Sayed-Khaiyum has clarified that the increase in allocation to the RFMF was for the investment towards new technology.

On to rural development, government has allocated $3.7 million to construct a jetty in Rabi while the construction of jetties in Kadavu and Yasawa will continue next year.

Sayed-Khaiyum stressed that $2.8 million will be utilized under the rural electrification projects to provide electricity to people in Seaqaqa, Dreketi, Ra and Nadroga.

Another $3.5 million has been allocated in next year’s budget to construct and upgrade rural roads.

This includes roads in Buca Bay, Serea and Moto.

Government has also allocated $2 million to the Department of National Roads for the purchase of plants and machinery.

The budget for the Judiciary next year has been increased by $5 million from $11 million to $16 million.

Acting Finance Minister Aiyaz Sayed-Khaiyum said this will also see the appointment of new judges and magistrates in the country.

The office of the Director of Public Prosecutions has also received an increased budget.

The allocation has increased from $6 million to $8 million.

The annual grant to the Legal Aid Commission has also increased from $0.6 to $0.8 million.

Dairy farmers will now be able to run the operational aspects of the business after government today announced that the restructure of Rewa Dairy will see the company’s roles separated.

Acting Minister Aiyaz Sayed-Khaiyum said that the restructure which will be completed in two weeks, sees the separation of the company’s commercial functions from its corporate functions.

This will see a new company established and called the Fiji Dairy Company Limited which will be the commercial side of the company while the other one would be called Fiji Dairy Co-Operative Company and will be administered by the dairy farmers.

Sayed-Khaiyum also revealed that $2 million has been set aside to assist the farmers for the set up of the Rewa Co-Op.

Meanwhile, the commercial branch will be government owned and then later become privately owned.

REACTIONS

An extra $80 million in revenue is expected to be generated from the increase in VAT from 12.5% to 15%.

FIRCA CEO Jitoko Tikolevu said this is the estimated amount expected to be raked in by the 2.5% increase.

Fiji Chamber of Commerce president Peter Masey said it is time to bite the bullet and make the hard decision to increase VAT to ensure government finances are stabilized.

However, Consumer Council of Fiji CEO Premila Kumar said it will be a challenging year for consumers and they need to curb their spending.

Fiji Manufacturers Association and Flour Mills of Fiji chairman Hari Punja said the incentives for exporters and manufacturers will help bring back confidence and definitely improve the economy overall.

And with government significantly reducing duty on smart mobile phones, Digicel Fiji CEO David Butler said this will ensure more accessibility and increase mobile penetration.

Solicitor General and chairman of the Legal Aid Commission Christopher Pryde said the increased allocation to the commission will allow them to hire more lawyers.

Fiji Fish Limited managing director Graham Southwick said they are excited with the incentives announced in relation to the fishing industry which will help create more employment.

The Fiji Hotel and Tourism Association has welcomed the Government’s intention to keep helping the tourism industry.

President Dixon Seeto added the establishment of the Casino Industry is a good move and it will surely bring in more money for the Fijian economy.

A total of $23.5 million has been given to Tourism Fiji in the 2011 National Budget.

Fiji Audio Visual Commission chief executive officer Florence Swamy said a significant announcement has been made in relation to the Audio Visual Commission as smaller film producers will now be able to access the film rebate as the minimum spending requirement will be $50,000.

Education Minister Filipe Bole said their zoning of schools and free transportation programme will continue next year adding that they will be looking at distributing free text books to secondary schools from next year.

Minister for Women Dr Jiko Luveni said the provision in the budget for an additional $3.6 million for 10,000 more recipients will help them provide more for the vulnerable in society.

Health Minister Dr Neil Sharma has highlighted a number of improvements in sub-divisional and divisional hospitals around the country.

According to Dr Sharma, their priority now is to install new equipment in major hospitals around the country so that people do not have to travel Suva for health services.

The government also announced that the fuel concessions to the Bus Industry will be reduced next year from 18 cents per liter to 15 cents per liter and Fiji Bus Operators Association acting president Virendra Kewal said they will be making a comment after going through the budget.

With the increase in fiscal duty from 15% to 32% for all imported fresh and chilled vegetables and fruit juices and the additional 10% import excise tax imposed for fresh and chilled vegetables, Agriculture Minister Joketani Cokanasiga said this is to encourage local farmers to grow more.

The government has significantly increased capital expenditure next year from more than $320 million this year to $525.5 million next year.

This will see more capital projects including new or improved infrastructure and facilities for the people.

Meanwhile, Prime Minister Commodore Voreqe Bainimarama will meet with Fiji Rugby Union executives to discuss the request for next year’s Rugby World Cup.

No allocation was made for the FRU in next year’s budget, but Sports Minister Filipe Bole said government will make some allocations in the near future after the PM meets with the FRU officials.

Also today in the 2011 Budget announcement, assistance will be provided to Netball Fiji for their World Cup preparations in Singapore next year.

But this will be based on the amount of corporate sponsorship Netball Fiji will manage to secure.

Meanwhile, $80,000 has been allocated for hosting international tournaments, $100,000 has been allocated for overseas sporting tours, $100,000 has been allocated for sports scholarships and another $100,000 has been allocated for sports outreach programmes.

Story by: Fijivillage Team

Vat to increase to 15 percent - Nov 27

The price of goods and services which are not VAT exempt under the current policy structure will increase by 2.5% from the 1st of January next year after the government announced that VAT will increase from 12.5% to 15%.

The VAT exempt items under the current policy include the selected basic food items and pharmaceutical products.

Acting Finance Minister Aiyaz Sayed-Khaiyum however has also announced targeted assistance to the needy in society and at the same time has announced a number of capital projects through increased capital expenditure.

Sayed-Khaiyum said the VAT increase is necessary to meet government’s debt repayments but at the same time he said other measures are in place to cushion the blow on the people.

Story by: Paradise Tabucala, Sofia Koroitanoa & Ana Naisoro

Increase in RFMF allocation for new technologies - Nov 27

Acting Finance Minister Aiyaz Sayed-Khaiyum has clarified that the increase in allocation to the RFMF was for the investment towards new technologies.

The allocation for the RFMF has increased from $100.7 million to over $108 million.

Sayed-Khaiyum said the increase in allocation is well overdue.

Story by: Paradise Tabucala, Sofia Koroitanoa & Ana Naisoro

5 main govt depts to review level of staffing - Nov 27

A total of five main government departments will be undergoing a review of their level of staffing.

This was revealed by Acting Minister for Finance Aiyaz Sayed-Khaiyum during the announcement of the 2011 National Budget yesterday.

Sayed-Khaiyum said that the five departments include: Education, Health, Agriculture, Works and Public Utilities.

Sayed-Khaiyum also revealed that in an effort to get rid of duplication in the civil service, the services of the Multi-Ethnic Affairs Ministry will now be distributed to other ministries.

Sayed-Khaiyum said that these ministries that are taking on further roles are performing the same responsibilities.

These changes will come into effect next year.

Story by: Paradise Tabucala, Sofia Koroitanoa & Ana Naisoro

Govt in talks with FNPF to divest overseas properties - Nov 27

Government is currently in talks with the Fiji National Provident Fund to divest their overseas properties to reduce Government’s operating costs.

In the 2011 National Budget announcement yesterday, it was revealed that apart from reducing government’s operating costs, this will also allow FNPF to invest offshore.

Meanwhile, FIRCA has been allocated an additional $12 million to improve staff capacity, capability and to extradite processes while government has revealed that they will now rationalize the giving of grants to statutory bodies which have liquid assets and revenue streams that could be utilized for their operational costs.

One such example is CAAFI which will no longer receive any income from the airport departure tax.

Story by: Sofaia Koroitanoa

FNU allocated $28M - Nov 27

A total of $28 million has been allocated to the Fiji National University.

It was announced in the Budget address that the integration of various institutions into FNU last year has enabled government to better coordinate the development of Fiji’s tertiary education and allow for effective use of resources.

In addition to its operating grant of $24 million, FNU will also receive an additional $4 million for several upgrades for all its campuses around the country.

Meanwhile, the National Employment Center has been allocated $1 million to train 500 people to enter the workforce.

Story by: Sofaia Koroitanoa

FCOSS disappointed over confirmation of casinos - Nov 27

The Fiji Council of Social Services has expressed disappointment saying that the most negative aspect of the budget is the confirmation of the establishment of casinos.

Executive Director Hassan Khan said casinos are known to break families and increase poverty and hardship among communities adding that all the good measures that have been put in place will be ineffective.

Khan also said their biggest disappointment is the 50% reduction in grants to voluntary social welfare organizations from $400,000 to $200,000.

He said FCOSS had made a strong submission on the need for a social pension scheme and hopes that this will be revisited.

Khan said more money is being poured into prisons, remand centres and the Judiciary when more funds could have been provided for social and community development such as youth development work of faith based organisations, family nurturing, development of rural women and children.

Story by: Ana Naisoro

Govt to use initiatives to encourage cane farmers to stay - Nov 27

Government said a number of initiatives will be put in place in order to encourage farmers to remain in the sugar industry.

In the 2011 Budget announcement yesterday, Acting Finance Minister Aiyaz Sayed-Khaiyum revealed that a total of $123 million has been allocated to support the sugar industry.

Sayed-Khaiyum said government is committed to salvaging the sugar industry as more than 200,000 people or 20% of the country’s population depends on it for their livelihood.

Meanwhile, Permanent Secretary for National Planning Peter Wise said government will closely monitor the implementation of proposed reforms for the industry.

Story by: Ronal Deo & Ana Naisoro

FIRCA to implement tax self assessment regime - Nov 28

The Fiji Islands Revenue and Customs Authority will implement an income tax self assessment regime from 2012.

This was revealed by Acting Minster for Finance Aiyaz Sayed-Khaiyum at the 2011 National Budget.

With this system, individuals will not have to lodge tax returns at the FIRCA office.

FIRCA CEO Jitoko Tikolevu said what that actually means is that when that comes into force for example PAYE, taxpayers will no longer be required to lodge returns.

He added everything will be done internally at FIRCA but employers need to be responsible to inform FIRCA of any changes in terms of allowances.

Tikolevu said this would save costs in terms of resources and people from this function will be taken to other value adding functions at FIRCA.

In addition, Sayed-Khaiyum said FIRCA will implement a presumptive tax regime from 2013 which will provide a simplified tax regime for Small Business Enterprises.

Story by: Ana Naisoro

2011 budget to benefit everybody - Nov 29

The Fiji Commerce and Employers Federation believes that the 2011 National Budget has benefits for everybody in the country.

President Nesbitt Hazelman said they are encouraged that the government continues to maintain its focus on enhancing economic growth.

He said the budget reinforces government’s past intention to continue to grow the economy with targeted incentives to assist businesses.

Hazelman said the increase in VAT from 12.5% to 15% was expected and while it will have a direct impact on businesses and consumers alike, these poverty alleviation policies will target assistance to those that need it most in the society.

Story by: Sneh Chaudhry

Water Resource Tax to bring in more money for Govt - Nov 29

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



 
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