NEWS

2020-21 National Budget: What’s In It For Companies

“These innovative approaches can help capture massive market and investment opportunities.” - Minister for Economy and Attorney-General Aiyaz Sayed-Khaiyum
18 Jul 2020 14:25
2020-21 National Budget: What’s In It For Companies

One hundred-and-fifty per cent tax deduction is on offer for companies who list corporate bonds on the South Pacific Stock Exchange (SPX).

Additionally, another 150 per cent deduction allowed on interest paid on corporate bonds.

Any interest income will also be tax-exempt.

This was announced last night by Minister for Economy and Attorney-General Aiyaz Sayed-Khaiyum during the 2020-2021 Appropriation Bill in Parliament.

“These innovative approaches can help capture the massive market and investment opportunities,” Mr Sayed-Khaiyum said.

“But just because it’s safe to travel doesn’t mean people will travel –– but if the deals are good enough, we’ll fill the planes.

“Government is prepared to empower our national carrier and hoteliers to offer visitors those irresistible opportunities, but our tourism operators must match that commitment by adapting to the “new normal” both in safety and in sales.

“That model –– that mix of government commitment and business creativity –– must define Fiji’s recovery from COVID-19.

“It is the surest way we allow Fijians to swim sustainably, rather than just be kept afloat.   But if we want to make the best possible partner out of Fijian businesses, in tourism and otherwise, we cannot price or  tax our way to recovery.”

Stamp Duty

In the COVID-19 Response Budget, stamp duty levied on mortgages for resident taxpayers was reduced from 1.75 per cent to zero, and stamp duty levied for foreign taxpayers was reduced from 5 per cent to zero.

That reduction –– set to expire on 31 December 2020 –– is now permanent.

Minister for Economy and Attorney-General Aiyaz Sayed-Khaiyum said: “But we’re going much further, all stamp duties are hereby abolished; making transactions faster and cheaper for everyone.

“That broad-based change means there are no longer any stamp duties on any government document –– from buying a house, a car or any hire purchases, that financial burden has been eliminated for good.

“Mr Speaker, when it comes to customs duties, we are building an entirely new tariff structure; one centred around simplicity and liberal trade, with a special focus on cutting costs for the tourism sector and making life more affordable for ordinary people.”

Businesses-friendly measures

Attorney-General and Minister for Economy Aiyaz Sayed-Khiayum last night announced the continuation of a number of business-friendly measures previously announced in the COVID-19 Response Budget:

  • The payment of advanced corporate taxes is now permanent.
  • The implementation of the VAT Monitoring System will be extended until 1 January 2022.
  • The debt forgiveness provision will be extended to 31 December 2021 to grant businesses another full calendar year of flexibility.
  • Following the suspension of thin capitalisation rules through 31 December 2020, the thin capitalisation ratio will now permanently increase to 3:1.
  • The depreciation write-off incentives for fixed assets up to $10,000 is now permanent. As will be the 100 per cent write-off for the construction of commercial and industrial buildings, so there’s no need to seek provisional approval by year’s end.
  • The provision allowing landlords to claim tax deductions on the sum for any reductions made in commercial rent will be extended an additional year, to 31 December 2021.

 

Edited by Ivamere Nataro

Feedbackjyotip@fijisun.com.fj



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