NEWS

2020-21 National Budget: What’s In It For Employers And Employees

The reduction of mandatory employer and employee FNPF contributions to 5 per cent will be extended through 31 December 2021.
18 Jul 2020 14:46
2020-21 National Budget: What’s In It For Employers And Employees

Employer and employee FNPF contributions

The reduction of mandatory employer and employee FNPF contributions to 5 per cent will be extended through 31 December 2021.

But, all employers who go beyond the call of duty and contribute more than 5 per cent up to 10 per cent, will be given a generous 150 per cent tax deduction backdated to 1 April 2020. This additional contribution will be exempt from taxes for employees.

To further incentivise employers to go that extra mile for their employees, fringe benefits offered by employers tax exempt.

Resorts, Bars And Restaurants

Resorts, bars and restaurants will see a massive reduction in excise taxes on alcohol.

“Fifty per cent reduction that will allow our hotels, resorts, bars and restaurants to pass on those savings directly to consumers.

“Market Survey has shown that Fijian resorts and hotels can be overpriced, especially when it comes to food and beverage services. As an immediate effect of these tax cuts, we expect the price structures for rooms, food, alcohol –– basically everything –– to drop precipitously.

“And tourism operators should consider making these changes to their cost structure permanent. So, as Fiji looks to safely reopen to tourists, our hospitality industry can even get creative with all-inclusive options that allow us to be cost-competitive with destinations like Bali and Phuket, when they open for businesses, they will do so with a vengeance!”

Customs duty on 1600 items cut

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum last night announced Government’s plans to cut customs duty on 1600 items which will see the cost of imported goods reducing.

“We’re cutting customs duties on over 1600 items –– from toothbrushes to spectacle lenses, contact lenses and artificial eye solution; to testing equipment for businesses to help lower production costs; to life jackets, life belts and fire alarms to strengthen public safety; to laundry detergent; to exercise books;

to hygiene products like deodorant and shampoos; to food items, like tomatoes, jams, soy sauce, salmon, sardines, cereals, sweet biscuits, potatoes, chocolates, pasta, baking powder and peanut butter; and on to other tourism-related equipment.

“On over 1000 items duties are falling to five per cent or zero per cent, and on more than 500 items, duty is falling from 32 per cent to 15 per cent.”

Duty on equipment

In the past, the equipment could be zero-rated on an ad-hoc basis through a bogged down bureaucratic process. No longer. Goods that cannot be manufactured in Fiji are seeing massive duty reductions, with customs duties falling to five per cent, and zero per cent in some cases:

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum last night announced:

We’re eliminating the duty for all items under the Customs Tariffs Act 1986, which includes machinery, mechanical appliances and mechanical parts;

We’re reducing fiscal duty to 5 per cent and eliminating import excise tax on a range of white goods, including air conditioners, refrigerators, televisions, washing machines, dryers, dishwashers, microwaves, lawnmowers, hairdryers, toasters, electric stoves and kettles, and smartphones.

We are reducing the specific duty by 75 per cent on hybrid cars and non-hybrid cars. In addition, for new, non-hybrid cars we are reducing the fiscal from 15 per cent to 5 per cent. Lastly, on all non-hybrid cars, we are removing the excise duty. There’s no restriction on age for vehicles to qualify for these exemptions, but all non-hybrid cars must meet Euro 4 Fuel standards. The luxury vehicle levy has also been removed and the Accident Compensation Levy has been halved through the next year.

And new air-bag trailers for trucks –– which are much gentler on our roads –– are not only duty-free, buyers can access a $20,000 grant towards their purchase. Used air-bag trailers will now only attract a 5 per cent duty. By getting these more agile vehicles on our roads, we actually keep our roads from deteriorating. We’re thankful to those trucking companies which are complying with our road loads.

 

Edited by Jonathan Bryce

Feedbackjyotip@fijisun.com.fj

 



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