Customs changes
THE National Budget 2021/2022 announced on 16 July 2021 reflects a number of changes in terms of duty reduction and other key amendments that has taken into consideration the effects of COVID-19 on the Fijian economy. Such reductions and incentives assist the businesses and traders as well as the community at large in terms of employment, access to better and diversified products and also sustains the economy.
In this week’s Tax Talk we will focus on some major amendments made in customs in the 2021/2022 National Budget.
1. Reduction in fiscal duty (Refer to table 1)
2. Incentives introduced In addition to duty reduction, incentive packages have also been designed to encourage investment and more employment in the country such as the following.
3. Bonafide passenger In anticipation of the reopening of the borders for international travel and tourist activities, the duty free allowance on other dutiable goods for a travelling passenger disembarking in Fiji has been increased from $1000 to a value not exceeding $F2000. This means that a travelling passenger is exempted from duty if the value of other dutiable goods does not exceed $F2000. If the value of the goods is above $F2000, duty becomes applicable on the excess of the allowance. Furthermore, on the same note and in expectation of high volume of travel once borders re-open and in addition to the normal passenger allowance, a travelling passenger’s unaccompanied luggage is eligible to a duty free allowance of not exceeding $F2000 provided that the luggage is:
■ imported within 3 months of the travelling passenger’s arrival into the country,
■ are for personal use and
■ not extended to commercial importation.
4. Assistance to businesses and SMEs and other key changes
For local goods that are manufactured locally and may not be sufficiently available or if there is a national shortage, such goods can be imported into the country at a reduced rate of duty at 5 per cent Fiscal, Free Import Excise and 9 per cent VAT, provided that confirmation is obtained from the local manufacturer
in this regards. Examples of goods facilitated under this concession are steel pipes, galvanised pipes, rectangular tubings, cement, timber, reinforcing bars, veneer plywood and nails or any other locally manufactured goods. Cement currently can be imported into the country at a reduced rate of 5 per cent Fiscal, Free Import Excise and 9 per cent VAT for the period August 1, 2021 to December 31, 2021.
Hotels and resorts are eligible for duty concession on the importation of building materials, kitchen, dining and bedroom amenities, front office amenities and outdoor equipment at Free Fiscal, Free Import Excise and 9 per cent VAT. The rates have been reviewed from a concessionary rate of 3 per cent fiscal to zero fiscal applicable from 1 August 2021 to 31 December 2022.
To be eligible for duty concession on the importation of used diesel and petrol vehicles imported for the purposes of taxi (who own only one taxi), the vehicle must not be more than five years old from the year of manufacture.
To assist the businesses in terms of managing their ash flow during this
difficult times, Deferment of VAT payment for a period of two months for Gold Card Customers has been introduced.
Deferment of duty for compliant bonded warehouse operators for a period of 1 month in order for them to manage their cash flows and look for prospective customers (local/ export) before payment of duty to FRCS.
Offsetting of tax debt – overpayment of customs duties, bonds or fees can be offset against tax debt. Not applicable for disputed amounts.
Dishonored cheques – will incur a fine of $500.
Claim for refund of customs duty is to be re-lodged within a maximum of 30 days and can be claimed for a minimum value beginning from $50.
Penalty for infringement of the Customs Prohibited Imports and Exports Regulations is increased from $10,000 to $25,000.
100 per cent electric vehicles and quad bikes are exempted from Euro 4 criteria. Euro 4 is a globally accepted European emission standards for vehicles that requires them to more environmental friendly.
E-cigarettes will require
import permit from Ministry of Health for importation – commercial purposes.
To ensure anti-dumping, pasta, chips, noodles and biscuits will need to have a shelf life of not less than three months when imported – commercial purposes.
Hotels and resorts, private importation Travelling passenger allowance
and crew allowance and importation of unaccompanied passenger luggage shall be exempt from the Environment Climate Adaptation Levy (ECAL).
With effect from 1st August 2021, Freight forwarders will now be required to obtain a licence from FRCS under the Customs Tariff Act 1986 in order to act and manifest goods for importation/exportation.
For the 2021/2022 National Budget Summary on Revenue Policies, visit https:// www.frcs.org.fj/wp-content/uploads/2021/07/20212022-National-BudgetSummary-of-RevenuePolicies.pdf. For more information, please email us on info@frcs.org.fj.