The Government has announced a $2 billion direct government stimulus package. Free medicine will continue to be paid for.
Fijians can continue accessing free healthcare. Salary increments for teachers who obtain new qualifications will now be approved and paid in the next financial year.
Those who genuinely cannot afford to pay their water bills would have payments deferred rather than be disconnected. That policy will be extended to 31 March 2021.
For subsidised customers of Energy Fiji Limited, the first 100 units of power will continue to be discounted through 31 March of next year, with Government and EFL each covering 50% of this subsidy to ensure these customers pay only VAT on their first 100 units of power every month.
For grid extension projects, EFL will consider, on a case-by-case basis, payment schedules up to six months or more for large capital investments. Government will be cutting salaries for all Permanent Secretaries and the CEOs and Heads of Commissions and Independent Bodies by 10%, effective from 1 August 2020. This will not apply to the legislature and judiciary as the other 2 independent arms of the state.
In partnership with International Finance Corporation, Government is finalising a public-private partnership financing model to allow for the construction of multi-story housing projects across Viti Levu.
With regard to the First Home Buyer’s Programme, for households who earn less than $50,000 a year, they will be granted $30,000 to build their first home and $15,000 to buy their first home.
For families earning above $50,000 annually, they can be granted $20,000 to build their first home and $5,000 to buy their first home. Government will be funding new Fiji Police stations in Nakasi, Nadi, Lautoka and Nalawa, will be promoting 257 officers to senior positions, and will be recruiting 137 new officers to bolster the ranks of the Police.
Government will be allocating another $6.0 million to complete the second phase of their Fiji Police Reform and Restructure Programme. Projects of urgent, potentially life-saving importance will continue to be funded. The remainder of the World Bank funding received to connect Vanua Levu to Viti Levu will be used to carry the “Northern Connectivity” Project to 42 more schools and health centres in the Northern Division.
Government is funding the hiring of 223 intern nurses, the hiring of 40 midwives, and the advancement of 105 medical interns to become full-time medical officers, now that they’ve completed their 1 year of intern service. Internships for doctors will be 2 years.
Those who are fully unemployed due to COVID-19 will continue to receive $220 per fortnight.
Those whose working days or hours have been reduced will receive $44 per fortnight for every day they are no longer working. If salaries have been cut by more than half, one can now access a one-off assistance payment of $1,100 for their FNPF General Account.
If salaries have been reduced by less than half, one may access a one-off $500 payment. FNPF will allow withdrawals from those who have been unemployed for 6 months who, to-date, have not been allowed to withdraw.
Government has made $100 million available to make sure every unemployed Fijian is able to access their full relief payments. Within that allocation, $5 million is dedicated to upskilling or reskilling workers whose old jobs have been lost, but for whom new opportunities await. NGOs that Government works with will continue to be funded.
Government will be reducing the guaranteed price for cane from $85 to $70 in the final third season. Bus fare for pensioners will be reduced by $10 a month. Government will be suspending the Parenthood Assistance Payments announced last year.
Government will be reducing meal allowances from $20 to $10 and instead of paying overtime, Government will be giving enough time in lieu of overtime. Government will be suspending the rural housing allowance and bundled insurance will now only apply to social welfare recipients. Government will be prioritising opportunities for employment. For example, by choosing to hire more police officers and build more posts rather than fund short-term administrative projects. Reclaiming Fijian citizenship has been made more attractive than ever by reducing the associated fees.
Free education will continue. Free textbooks will continue. Subsidised transportation to school will continue to be paid for. Policy changes will be made for TELS, to raise the qualifying standards for students and lower costs. Only students who earn marks above 250 on their Year 13 exams will qualify. Government is also lowering TELS and Topper’s Scholarships. TELS repayments will be suspended another year, until 31 December 2021.
Government will be redistributing the free education grants to schools, assigning resources more efficiently to cut costs by 20%, while ensuring schools in more rural areas actually see a larger share of the total allocation.
Government will also continue supporting micro, small and medium enterprises through their highly-concessionary loan packages. In addition to the $30 million set aside for this initiative last year, they are adding an additional $30 million this year.
On top of the $3.4 billion in loan repayments already deferred, the Association of Banks have agreed to, on a case-by-case basis, extending loan deferments until 31 December 2020. $8 million in spending across our foreign missions by centralising country accreditation will be cut. Government missions in Washington DC, Seoul, Port Moresby, Brussels and Kuala Lumpur will be closed permanently. The Fijian Governments’ remaining embassies in Geneva, New York, Tokyo, London, Abu Dhabi, Wellington, Beijing, Jakarta, New Delhi and Canberra will expand country accreditation and engage more locally-based staff. To incentivise investments in water infrastructure, investors and developers will no longer be required to cover investments fully upfront. Payments can be scheduled within 3 months of a projects’ construction, including the requirement to safeguard government expenditure through bank guarantees. To fast-track the progress of construction projects, Government has allocated funding for what they call “shovel-ready” sites, ones where much of, if not all of, the necessary planning and prep work has already been done. The Ministry of Commerce, Trade and Tourism and Transport has established a Building Permits Evaluation Committee to ensure all applications are processed within 60 days of the date of submission; establishing a single source for all aspects of the application and a speedy turnaround for approval. Any company which builds buildings for Government use say a new office building, the duty will be waived on all the raw materials, machinery and equipment necessary for construction. Once that building is complete, the rent paid by the Government to the landlord will be tax-exempt, earning them tax-free returns on their investment for the period of Government’s tenancy. Government is offering a similar deal for the construction of new private hospitals and medical service centres. For anyone building or upgrading a hospital, depending on the level of investment can be granted up to a 20-year tax holiday on the new hospital or up to a 60% tax deduction on renovation works. FICAC has been funded with $8 million in the next financial year. The Fiji Roads Authority will receive a $348.9 million allocation in this year’s budget. Government will be working through Fiji Airways to provide the first 150,000 visitors with a once-in-a-lifetime travel stipend of around $400 per passenger to go towards tourism packages including flights, hotels and meals and beverages. Any sponsor which donates to a Fiji National Sports Commission registered entity will receive a 150% tax deduction, the $10,000 minimum threshold has been removed. A 150% tax deduction will be available to all hotels and restaurants who hire local artists, such as musicians, dancers and craftsmen. And among those 1,600 items seeing duty reductions are speakers, microphones, headphones and earphones, and all musical instruments, all of which will now incur 0 duty. Among the over 1,600 duty concessions, Government has removed duties on raw materials, machinery and equipment for the construction of public rental housing. The 100% tax deduction on reduced commercial rents by landlords from 1 April 2020 will now be extended until 31 December 2021. Businesses who invest in new subdivision projects for both residential and commercial lots will not only have duties waived on construction inputs, they can access up to 60% in tax deductions and any profit they make selling the newly developed lots will be tax-exempt. 150% tax deduction for companies who list corporate bonds on the SPX, with another 150% deduction allowed on interest paid on corporate bonds. Any interest income will also be tax-exempt. Eliminating the 6% Service Turnover Tax.Reducing the Environment and Climate Adaptation Levy from 10% to 5% across the board. Removing $100 off the departure tax. For the reduced ECAL, the turnover threshold is now $3 million annually, more than double the previous amount of $1.25 million. So for mid-sized tourism operators and other businesses like restaurants, rental car companies and cafes, ECAL is dropping to 0. 50% reduction on excise taxes on alcohol that will allow our hotels, resorts, bars and restaurants to pass on those savings directly to consumers. Stamp duties are hereby abolished; making transactions faster and cheaper for everyone, including stamp duty levied on mortgages for resident taxpayers and stamp duty levied for foreign taxpayers. Eliminating the duty for all items under the Customs Tariffs Act 1986, which includes machinery, mechanical appliances and mechanical parts. Reducing fiscal duty to 5% 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. Reducing the specific duty by 75% on hybrid cars and non-hybrid cars. In addition, for new, non-hybrid cars, a reduction in the fiscal duty from 15% to 5%. On all non-hybrid cars, removal of 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. New air-bag trailers for trucks are duty-free and buyers can access a $20,000 grant towards their purchase. Used air-bag trailers will attract a 5% duty. Cutting of customs duties on over 1,600 items. Reduction of duties on over 1,000 items to 5% or 0%. Reduction of duties on more than 500 items from 32% to 15%. All personal imports will now be duty-exempt up to $2,000. 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. All residential rents, regardless of turnover, are now VAT exempt and removal of the VAT Reverse Charge on supplies received from abroad. The depreciation write-off incentives for fixed assets up to $10,000 is now permanent. 100% write-off for the construction of commercial and industrial buildings. 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. The reduction of mandatory employer and employee FNPF contributions to 5% will be extended through 31 December 2021. All employers who go beyond the call of duty and contribute more than 5% up to 10%, will be given 150% tax deduction backdated to 1 April 2020. This additional contribution will be exempt from taxes for employees. Fringe benefits offered by employers are tax exempt. To keep things simple for the “telcos”, the data levy introduced last year and the telecommunications service licensing fee has been replaced with a single 2% revenue-based telecommunications license fee. Streamlining of the tax code around depreciable assets to allow assets to be taxed at 10% of Capital Gains Tax rather than 20% of income tax. From 1 August 2020, Fiji will end the business license regime. To start a business in the next financial year, one can complete an easy, online business incorporation and tax registration. $200,000 will be injected in budgetary support to smaller municipal councils to make up lost revenues. The penalty for late tax payment is being reduced from up to 300% to 15% annually.