Tuesday, November 29, 2011

Fiji: Fiji PM says tax cuts for the 99%, will reduce burden for taxpayers and businesses

SOURCE Republic of Fiji

Republic of Fiji's Prime Minister Josaia Voreqe Bainimarama has announced his Government is cutting taxes for 99% of Fijian taxpayers in 2012 and beyond, in addition to across-the-board tax cuts for businesses.

In his annual budget address, the Prime Minister said, that "for too long the 99 percent' have been shouldering most of the tax burden. They have the lowest incomes, but contribute the most towards our tax collection. This just isn't fair."

The new progressive tax structure is designed to "put more money in the pockets of Fijians" in a way "that grows our economy and ensures fiscal sustainability," he said.

"For decades, Fiji was steered off course by greed, poor management, and selfishness," Prime Minister Bainimarama said in his address to members of Government, citizens and the Fijian business community. "My Government in recent years has been working to set things right for all Fijians."

Fiji's tax rates will be dropped across the board to an absolute ceiling of 20% for individual taxpayers (down from 31%) and for businesses (down from 28%). The minimum tax threshold will be raised for the second time in three years to eliminate taxes for low-income earners.

In addition, the Government announced a new way of funding social welfare programs.

"There are certain members of our society who need help. The top 1 percent of taxpayers will now be contributing more fully to the social good," the Prime Minister said. Aid programs to "reach the most vulnerable and marginalized in society through targeted social assistance" will expand.

A temporary "Social Responsibility Levy" will be applied to the wealthiest 1% taxpayers to support programs that help the poor and marginalized. The levy will be reduced and eventually eliminated as people progress off of welfare programs and/or as Fiji's GDP grows. New taxes will also be applied in some services areas.

The Bainimarama Government affirmed the schedule for national elections in September 2014, and committed $5.9 million in the 2012 Budget for electronic voter registration. Fiji will have in place a new constitution establishing a fully representative government guaranteeing universal suffrage in September 2013.

"For the first time in Fiji's history," the Prime Minister said, "we will have a truly democratic system: one person, one vote, one value."

For the full text of the Prime Minister's Budget Address.