Budget of Hope for Our Tourism Sector: Whitton
The tourism sector have been provided with additional tax incentives to encourage more operators to build this industry better in preparation of the reopening of the borders.
This was announced by the the Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum, during the 2021/2022 National Budget address last Friday.
“By this Christmas, if we reach our vaccination targets, we could be fully protected from the coronavirus thanks to widespread immunity through vaccines,” Mr Sayed-Khaiyum said.
“Gatherings can take place, sports can be played, and we can pray together in our houses of faith. Our borders could be open to some of our most important source markets of tourism. Planes could be flying. Careers could be restored.
“Government revenues could be on the rise so we could deliver even more services and achieve more of our vision for the country. The ocean and our natural environment could offer us more than their beauty –– they can provide us with many more sustainable livelihoods. And with our economy restored, when a climate-fuelled disaster inevitably strikes us, we could respond from a position of strength.”
Tony Whitton, Managing Director of the Rosie Travel Group said: “The important statement made by the Minister for Economy, during the 2021/2022 National Budget address was “We hope to have tourists back by Christmas”. As an industry we also share this hope. The closure of our borders for over a year, has had a dramatic impact on our economy with over 100,000 workers that relied directly or indirectly on tourism are without work. And over 15,000 tourism and associated businesses without any cash flow for over 15 months.
“A number of targeted rebates for tourism initiatives were announced tonight of which we are grateful from tax free rebates for new resort construction under SLIP to insurance cover for international visitors when borders re-open.”
Mr Sayed-Khaiyum said under a Short Life Investment Package (SLIP), new hotel investment projects are offered five years’ income tax holiday for capital investments from $250,000 to $1 million, a seven-year tax holiday for investments between $1 million to $2 million and a 13-year tax holiday for capital investment exceeding $2 million.
“To further incentivise new investments in hotels, a 20-year income tax holiday will be offered for investments above $40 million. Customs duty exemption will continue to be provided on all capital goods, including capital equipment, plant and machinery equipment, building materials, furnishing and fittings, room amenities, kitchen and dining equipment and specialised water equipment.
“We are also extending the tax holiday to existing hotels. For refurbishment and renovations above $2 million dollars, a fiveyear tax holiday will be available with associated customs duty concessions. The 25 per cent investment allowance currently available to existing hotels will be increased to 50 per cent to assist with renovations and refurbishments.
“Duty concessions will also be provided under code 245 of the Customs Tariff. In the 2020-2021 Budget, we had announced a $60 million allocation for the Fiji Recovery Rebate Package which was not used because the borders remained closed. For this budget, we are providing an allocation of $40 million under this package. Tourism Fiji is provided an operating grant of $6.2 million and a marketing grant of $20 million.
“We are also allocating $3.5 million to provide an insurance scheme for incoming tourists with a maximum cover of $10,000 for quarantine expenses, health care support and changes to travel dates in the event that these tourists, upon arrival into Fiji, test positive for COVID-19.”
Support for small to large businesses impacted by COVID
For Mr Whitton what stood out for him as well was the new Fijian Business Working Capital Support for small to large businesses impacted by COVID.
“The national budget announced tonight (Friday night) is making available life sustaining working capital under a $200m Reserve Bank of Fiji two year interest free loan guarantee scheme, providing soft loans that will extend a life line to tourism businesses to ensure that they stay operational and when the borders reopen, they can start re-employing and help rebuild the economy.”