Income tax threshold increased from $16,000 to $30,000

The government has made major announcements about personal income taxes for people and has also confirmed pay increments of sections of the civil service.

While delivering the 2017/2018 National Budget address, Minister for Economy Aiyaz Sayed-Khaiyum says the income tax threshold has been increased from $16,000 to $30,000.

Sayed-Khaiyum says this is a benefit for everyone as people will not pay any personal income tax up to $30,000 of personal income.

This will relieve the annual burden on taxpayers by approximately $26 million annually and increase consumer spending power.

He has also confirmed that the job evaluation has been undertaken in the civil service and this has resulted in the setting up of 15 salary bands.

Based on performance, civil servants will fall under the salary bands.

Wages and Salaries

There is good news as government wage earners will receive an average wage increase of 14.3 percent.

Sayed-Khaiyum says the average increase for the common cadre is 15 percent.

The wage increases will commence in July.

Specialised nurses will also get salary increases of 25 percent while nurse practitioners will get a 74 percent salary increase.

Sayed-Khaiyum confirms that teachers’ salaries will increase by 14.3 percent while school heads will get a salary increase of 13.8 percent.

Police officers will get salary increases ranging from 11.5 percent to 20.5 percent.

The Police budget has increased to $148.8 million.

This is an additional $17 million.

Tax and Levies

All tax free regions and commercial agriculture, bio-fuel and accelerated depreciation have been extended from 2018 to 2028.

The Environment levy will be renamed as the Environment and Climate Adaptation Levy and will directly fund environmental protection programmes and climate adaptation projects.

A special purpose fund will be established to better utilise funds generated by the levy to finance environment and climate change related projects.

The levy has been increased from 6 percent to 10 percent.

Sayed-Khaiyum has announced that the Service Turnover Tax has been reduced from 10 percent to 6 percent.

A plastic bag levy of 10 cents will be charged per plastic bag used in order to reduce plastic waste and usage in Fiji.

The Minister for Economy says this will form as part of the Environment and Climate Adaptation Levy. 

It will be applicable to all businesses but implemented on a phased approach beginning with all businesses with the Point of Sale System.

A 10 percent Environment and Climate Adaptation levy now applies to income earned above $270,000. 

To fully offset this tax burden, the Social Responsibility Tax has been restructured to reduce the percentage of tax paid at every income bracket by ten percentage points.  

The Environment and Climate Adaptation Levy will now apply to the purchase of luxury cars with engine sizes greater than 3000 cylinder capacity. 

The levy will not apply to any vehicle utilised for public transportation, including taxis.

The current 12.5 percent Super Yacht Charter Fee will be replaced with a 10 percent Environment and Climate Adaptation Levy.

The zero fiscal and import excise duties on the importation of new hybrid motor vehicles will continue. 

To decrease tax burdens on taxi operators, the fiscal import duty on second hand hybrid cars for taxi businesses has been reduced to half for the next two years. 

This will apply to taxi operators who have only one taxi.

The import duty on new parts for motor vehicles is reduced from 15 percent to 5 percent. 

Import duty on batteries and cells used fro hybrid vehicles is reduced from 32 percent to 5 percent.

The Minister for Economy has also announced that import duty and import excise duty on the importation of new buses with seating capacity of 16 persons and more for bus companies with annual turnovers under $1.5 million has been reduced to zero for a period of two years.

These bus operators will also enjoy import duty of 5 percent and zero import excise duty on the importation of used buses.

The importation of all new and used vessels is now duty free for two years.

To ensure adequate supply of materials used in road construction, a 5 percent tax will be imposed on the exportation of rock, gravel and aggregates.

As expected, the price of cigarettes and alcohol will increase by 15 percent while excise tax on sweetened and carbonated drinks will increase by 15 percent, rising from 30 cents per litre to 35 cents per litre. 

Aiyaz Sayed-Khaiyum says in order to increase the number of Fijians with access to health insurance, employers who provide medical insurance to their employees will be exempt from fringe benefit tax.

All items imported to Fiji for health promotion programmes are exempt from fiscal import duty and import excise duty.

Import duty on energy bars is reduced from 32 percent to 5 percent.

Laws are being amended to ensure that all display prices, including menus at hotels, must display the tax inclusive price of goods to give tourists and customers accurate information on purchases. 

Penalty rates will be increased to combat non-compliant behaviour.

The government will also amend laws to protect tourists and hotel visitors by preventing situations where Service Turnover Tax and Environment and Climate Adaptation Levy are charged twice for recreational services by hotels and contractors, such as diving programmes and tours.

Fish supplied to PAFCO will be VAT zero-rated and suppliers will be accorded an Export Income Deduction incentive. 

Customs regulations will also be amended to require that all vessels that engage in the transhipment of fish pay the Fish Levy of $450 per tonne. 

Mother vessels will be excluded from the levy.

Stamp duty payments are eliminated on property transfers through love and affection.

All dividend taxation has been abolished.

The tax of 3 percent for residents and 9 percent for non-residents will be removed, making all dividend income exempt from taxation.

The Economy Minister says the amnesty on no tax and no penalties granted for declaration of foreign assets and income has been renewed.

The period will now last from 30th June to 31st December this year.

Aiyaz Sayed-Khaiyum says the government now has measures to ensure that traders that do not pass down the duty and tax reductions are taken to task.

The FRCA Act will be amended to increase information sharing with the Fijian Commerce Commission to carry out more effective price surveillance, and for FRCA to issue infringement notices to traders who do not pass duty and VAT reductions on to customers.

The Customs Act is amended to shift the burden of proof onto importers for any proceedings in the Act such as incorrect valuation and classification.

FNPF granted exclusive Casino licence

The Fiji National Provident Fund will be granted an exclusive Casino licence to construct a casino by the new convention centre at Momi Bay which will in turn support members of the Fund.

This has been revealed by the Minister for Economy Aiyaz Sayed-Khaiyum in the 2017-2018 National Budget address.

Sayed-Khaiyum adds that FNPF will build a state of the art, modern day convention centre with the capacity of 4,000 people at a cost of $90 million.

He says that FNPF’s future convention centre will be ready in time to host the Asian Development Bank Annual Meeting in 2019 and $4 million has been allocated for the preparatory works to host this meeting.

Education allocated $964.4M 

The Ministry of Education has been allocated a total budget of $964.4 million in the 2017-2018 budget.

The increase of $223.8 million will fund the 200 additional primary school teachers and 50 new secondary school teachers next year.

Teachers and staff of the Ministry of Education will also have an increase of salaries as a result of the Job Evaluation Exercise conducted as part of Civil Service Reforms.

A new government initiative will also allow first degree graduates to be given $300 as one-off start-up allowance to assist them prepare for job interviews.

This initiative applies to graduates with household income less than $30,000, and who are registered with the National Employment Centre and have yet to find employment.

The total allocation for Tertiary Education Loans Scheme is $196.4 million with an increase of $81.1 million compared to last year.

Some other new initiatives will allow students to repeat units and change their programme of study but they can only repeat their unit once.

$18.3 million is allocated to introduce incidental and book allowances for TELS students at $1,000 per annum or at least $500 per semester or $333 per trimester.

Allowances will be paid to TELS students during semester breaks so students enrolled in semester based courses will now receive an allowance of $6,600 per year or $3,000 per semester.

Students under TELS in technical colleges will now receive allowance payments.

The government has also allocated $9.2 million for students who have passed Year 12 and therefore meet the minimum requirements for certain engineering courses at FNU to also access TELS.

Total budget for Sugar Industry is $60M 

The government will continue to give strong support to the sugar industry.

$60 million has been allocated to the Sugar Ministry.

None of the farmers in Rakiraki will be affected if their cane is transported to Rarawai Mill. This assistance will continue over  three years. 

$5 million has been allocated to get more people into cane farming.

619 farmers who were not assisted under the Cyclone Winston package will receive assistance in the 2017/2018 National Budget

300 new trucks to be owned and operated by FSC. This will reduce costs for farmers. FSC will also get 20 mechanical harvesters. This will further reduce costs for farmers.
 

Total budget for Water Authority is $306.9M
 
The total budget for Water Authority of Fiji in 2017-2018 is $306.9 million. 

$5.7 million is allocated for the Urban Water Supply and Waste Water Management Project. 

$14.7 million will also be provided by the Asian Development Bank, $6.8m by the European Investment Bank while there will be a grant from the Green Climate Fund of $2.8m. 

The project is designed to support sustainable growth and development in the Greater Suva Area by increasing water supply capacity by 29 percent and waste water treatment capacity by 164 percent. 

As part of the project a new 40 mega litre treatment plant will be constructed in Viria, Rewa. 
 

Fiji Roads Authority allocated $527.5M

The Fiji Roads Authority has been allocated $527.5 million in the 2017-2018 National Budget.

The increase of $66.4 million in the 2017-2018 budget is mainly attributed to the need of increase in staffing from 130 to 170 employees and the expansion of the FRA in different divisions in the country.

An increase in capital expenditure due to the expansion of the street lighting, footpath, drainage and rural roads construction programme.   

Part of FRA’s ongoing initiative to improve the standard of existing road network is the maintenance programme which covers the overall road network to which FRA has allocated $80 million while Tropical Cyclone Winston rehabilitation of roads, bridges and jetties has been allocated $13.9 million.

The Fiji Roads Authority will also look to expand, build and upgrade rural roads throughout the country with an allocation of $60 million to complete this initiative. 

Freeze on taxi, minibus and carrier permits to be lifted from 1st January 2018

The freeze on taxi, minibus and carrier permits will be lifted from 1st January next year.                       

Minister for Economy Aiyaz Sayed-Khaiyum says first choice will be given to those who applied during the freeze period.

There has also been an increase in capital expenditure for the Ministry of Infrastructure and Transport due to the expansion of the Rural Electrification project which is $33.8 million.

$11.5 million has been allocated for the major grid extensions around the country.

27 new positions will also be established for enforcement and compliance units in the LTA.

$500,000 is allocated for the construction of a retaining wall to prevent erosion at the Government wharf in Walu Bay.

$5.9 million has also been allocated for rehabilitation of solar home systems and diesel schemes that were damaged by TC Winston.

The Ministry of Infrastructure and Transport has been allocated $134.2 million in the 2017/2018 National Budget. 

Maintenance work expected to be carried out at all military barracks

Maintenance work is expected to be carried out at all military barracks around the country to comply with OHS standards.

The government has allocated $330,000 for this initiative.

The Republic of the Fiji Military Forces will continue to support the UN Peacekeeping Operations in conflict zones around the world to promote peaceful resolution of conflict with an allocation of $77.3 million while $2 million will go towards the Blackrock Integrated Peacekeeping Centre and Peacekeeping Mission.

Another initiative includes $350,000 for the purchase of a survey boat for the Navy’s Hydrographic Unit and $300,000 for specialised medical and dental equipment for RFMF Health Support.

The government has allocated $96.7 million to the RFMF.

The major increase of RFMF’s budget also sees the increase in operating expenses for greater travel and improved communication, purchase of goods and services to better equip and prepare RFMF personnel.

New e-ticketing for bus passengers to be introduced later this year

New e-ticketing for bus passengers will be introduced later this year.

This will be later introduced for taxis and mini buses.

Fiji Accident Compensation Commission

The government will bring a new law which will result in the setting up of the Fiji Accident Compensation Commission to deal with injuries and deaths from accidents.

Sayed-Khaiyum says many victims of road accidents are not receiving compensation through Third Party Insurance just because the driver did not have a license or was drunk.

This will be applicable for motor vehicle accidents.

The Lump sum compensation will be paid under the No Fault Scheme.

There will be no more Third Party Insurance.

Vehicle owners have to pay to the Accident and Compensation Fund to LTA instead of the Third Party Insurance.

Total Expenditure for 2017/2018 National Budget - $4.357B

The Total Expenditure for the 2017/2018 National Budget is $4.357 billion while the Total Revenue is $3.85 billion.

A new Ministry of Waterways will be established and the Prime Minister will soon appoint the new minister.

Sayed-Khaiyum says the government will tackle head on the issue of flooding in Nadi.

The cost is $385 million over three years to widen and rehabilitate the Nadi River.

There are plans to access funds from the Green Climate Fund to assist in this project.

Sayed-Khaiyum highlights that some businesses did not provide reduced VAT and duties to the consumers.

He gave examples where duties were removed on baby products and cereals last year and no amount was reduced because there is only one supplier and they did not reduce the price.

Sayed-Khaiyum says those in monopolistic positions cannot dictate prices.

A special unit in FRCA will be set up, and the Commerce Commission will also look into this.

He also highlighted that one supermarket chain has been fined 53 million dollars for tax evasion.

5 new Legal Aid Commission offices will be opened - Kadavu, Rotuma, Keiyasi, Seaqaqa and Vunidawa.

$4.5 million allocated in Police Budget to purchase bikes and quad bikes

$4.5 million has been allocated in the Police budget to purchase bikes and quad bikes to improve responsiveness to emergencies and enhance safety on Fiji’s roads.

The first phase will see the purchase of 210 patrol bikes.

$298,000 has also been allocated to purchasing specialised policing equipment.

$1.6 million has been allocated to fund police operations during the conduct of the 2018 General Elections operations.

It has been announced that funding will be released depending on the scheduled date for the 2018 General Elections.

$1 million has also been allocated to construct a new Nadi Police Station.

$200,000 has been set aside to set up an automated license plate recognition system and install CCTV cameras in public areas in major urban centers around Fiji.

$77.2M increase in this year’s budget for Health Ministry

The increase in this year’s budget for the Health Ministry by $77.2 million has been attributed to the recruitment of 143 doctors, 200 nurses and other ancillary workers in hospitals around the country for better health services.

With the allocation of $321.2 million in the 2017-2018 budget for the Health Sector, the government plans to boost access for high quality medical services, maintain and construct new health facilities and properly equip all health facilities around the country.

The Health Ministry has allocated $1 million for the construction of a new National Kidney Research Treatment Centre in Suva which will act as a national hub for treatment and prevention of kidney disease.

$500,000 has also been given by the Health Ministry to the ITC Services to improve a supply chain management for medicines.

Government boosts home ownership for Fijian people

Good news for first home buyers as government has boosted home ownership for the Fijian people through assisting individuals seeking to buy or build their first home.

The Reserve Bank of Fiji in conjunction with the Fijian government has granted a total of $60M for affordable housing in the 2017-2018 National Budget.

Minister for Economy Aiyaz Sayed-Khaiyum says this housing assistance fund will be made available to households earning less than $50,000 a year at a 5 percent interest rate.

Sayed-Khaiyum also revealed the partnership government has with FNPF in the construction of a multi-unit housing development in Matavolivoli in Nadi that will offer different price points.

478 affordable housing will also be available by the end of 2018 as $7m has been allocated to subsidise the land development cost of two new subdivisions of the Housing Authority in Nepani and Davuilevu.

Preparations will soon be underway for 300 families in Nabua to be relocated to Waidra, Baulevu and $1.3m has been allocated under the Informal Settlement Relocation Programme to assist with this relocation.

Markets will also be decentralized as $960,000 has been allocated for roadside mini markets in Cuvu, the Old FNPF Building in Lautoka, Tavakubu, Savusavu, Nakasi, Nailaga, and Princes Road and $2.6m has been allocated for the upgrade of the Namaka market.

To continue to encourage physical activity and other civic engagement in Lautoka $1m has been allocated for the construction of an Indoor Sporting Facility, the redevelopment of Govind Park has been allocated $2.6M.

There will also be $1m allocated for the construction a new swimming pool in Narere, Nasinu.

$350,000 has been granted to subsidize municipal councils in the collection of rubbish from informal settlements and in areas within town boundaries.

The total budget of the Ministry of Local Government and Housing in 2017-2108 is $33.9m, comprising $6.6m for operating expenditure, $27.1 for capital expenditure and VAT of 0.2m

$4.62M provided to support in major overseas sports tournaments

With major overseas sports tournaments coming up later this year and next year, the government has provided $4.62 million to support teams’ preparations and build ups.

This includes the support for the Vodafone Fiji Bati towards the Rugby League World Cup in October, Pacific Mini Games, Commonwealth Games and Rugby Sevens World Cup in July next year.

The government has given $2.9M to support the hosting of a number of international tournaments including the Oceania Men’s and Women’s 7s tournament, 2017 World Cardet Challenge(Table Tennis), Junior Pan Pacific Games (swimming), Fiji National Regional Games(Special Olympics) and the Vodafone Flying Fijians international test matches.

Another ongoing initiative that will be supported is the engagement of international coaches where $1.5 million will has been set aside after its contribution towards Fiji’s first ever Olympic gold medal during the 2016 Rio Olympic Games in Brazil.

A total of $23.1 million was allocated to the Ministry of Youth and Sports of which $18.3 million is for operating expenditure.

Meanwhile the government will continue its support towards the construction of rural sporting complex in Kadavu and Gau. $2.01 million was allocated for these projects.

REACTIONS

Consumer Council of Fiji CEO Premila Kumar says this is a fantastic budget.

Kumar says they will continue to work with FRCA and the Fijian Commerce Commission so that consumers get the benefit duty and tax reductions.

However NFP Leader Biman Prasad says the 2017/2018 National Budget is an election budget.

Prasad claims that it is good politics but not a good policy.

Leader of Opposition Ro Teimumu Kepa says that the 2017-2018 National Budget is a typical vote buying budget.

Ro Teimumu has questioned the Minister for Economy on why has he made the announcement now and not after the 2018 general election.

Education Minister Dr Mahendra Reddy says the 80 new primary teachers will be recruited in August and September this year.

Dr Reddy says the other 120 new primary school teachers and 50 secondary school teachers will be recruited next year.

Health Minister Rosy Akbar says that the health budget allocation for the Ministry means efficient service delivery.

Permanent Secretary for Sugar Yogesh Karan says the increase in the budget will enable them to give priority to the issues in the sugar mills.

Police Commissioner Sitiveni Qiliho says service delivery will be done more efficiently with more funds provided.

The minimum wage rate for unskilled labourers has increased to $2.68.

Fiji Commerce and Employers Federation CEO Nesbitt Hazelman says the government took a cautious approach adding they are not opposed to increase in wages but be mindful of increases and create growth in the economy.

The CEO of Water Authority of Fiji Opetaia Ravai says whatever they wanted to be included in the 2017-2018 national budget has been taken into consideration in the budget announcement.

Ravai says everyone will be benefitting from the allocation to the Water Authority in terms of their services.

TELS Board Chair, Dixon Seeto says the increment and initiatives announced for the National Toppers Scheme and the Tertiary Education Loans Scheme is a great relief to the parents and students.

FEA Chairman Dakshesh Patel says the rural electrification project will be a planned rollout as they have received $33.8 million for the project which is an increase of around $19 million.

Minister for Infrastructure and Transport Parveen Bala says he is happy that whatever his Ministry has asked for has been given to them in the 2017-2018 national budget.

Bala says the highlight of this year’s budget for the Ministry of Infrastructure and Transport is the announcement of the freeze on taxi, minibus and carrier permit to be lifted from the 1st of January 2018.