EXPLAINER: BUDGET

Tourism operators should now do their part

Government has announced massive tax reforms, an overhaul of our taxes, all done to stimulate the economy. Now what? Now the tourism sector, for example, has to pass on those savings to tourists - both locals and international tourists, who have been provided with a number of incentives to come to Fiji.

Tony Whitton

Managing director at Rosie Holidays and Ahura Resorts Fiji Islands, Tony Whitton, whose hotels are Malolo Island Resort and LikuLiku Lagoon, was one of the first tourism leaders to acknowledge that tourism operators will now need to do their part.

He said: “On behalf of the tourism industry we commend Government for the wisdom in recognising that tourism will be a critical industry in ensuring our economy recovers from the impacts of COVID-19. The reduction in: Direct taxes, airport departure taxes, alcohol tariffs and marketing incentives for Fiji Airways and hotel packages will ensure that Fiji is priced competitively to attract international visitors when our airports open.

“We will do our bit to ensure these incentives are passed on to our international visitors to provide good value packaging and inspire them to visit Fiji. I note we are targeting 150,000 visitors in the first three months when airports open. We can do this with the right incentives that were announced. This will get our people back to work, government tax revenue flowing again and ensure the tourism dollar circulates to everyone in the community .

“Tourism is the Fiji’s largest foreign exchange earner , largest employer and largest source of tax revenue to Government and is an amazing force for good that can improve the social and economic wellbeing of every Fijian.”

Import taxes

Not only for the tourism sector. For the first time in Fiji’s history, import taxes on more than 1600 items have been announced. At a glance, one can see that a lot of thought had gone behind removing the taxes on these items. For example, import taxes on ingredients, used to make bread has been removed. This should mean that our bakeries pass on that savings to the consumers.

If operators are honest, they would use this savings to lower the prices of bread, which is almost a staple in every household. There has been massive reduction in import excise, from 32 per cent right down to 5 per cent. This is a bigger saving compared to removing 9 per cent Value Added Tax on basic food items.

Duty on fireworks, for example, has also been reduced from 32 per cent to 5 per cent. Consumers need to question sellers if they note that this saving does not get passed onto them when they go out to purchase fireworks during Diwali.

Duty on a number of equipment such as furnace and baking items has also been removed completely. This means that new business owners, who want to set up businesses, will see a reduction in price of equipment needed for their catering business.

Want to set up a laundry business?

No problem. Reach out to Fiji Development Bank with your proposal, get a Government guaranteed loan and purchase new industrial strength washing machines, irons etc on new duty reduced prices. Want to bring in small equipment yourself from overseas? Duty on import of personal items valued under $2000 has also been removed. The opportunities have been provided by Government in forms of loans, and now removal of import duty. Do you still have questions on how to start a business?

There is a dedicated team at the Ministry of Commerce, Trade, Tourism and Transport. They will be able to answer all your questions on how to go about starting a small business.