The interim government will lose $20 million in revenue after cabinet announced yesterday that the Income Tax threshold will increase from $9,000 to $15,000 from the 1st of next month.
However, Fiji Islands Revenue and Customs Authority Chief Executive, Jitoko Tikolevu confirmed that the increase in threshold will bring relief to an extra 19,000 people who won't be taxed from next month.
The increase in threshold means that from the 1st of next month, people earning up to $15,000 per year will not pay any income tax.
Apart from the increase in the income tax threshold, there will also be a reduction on selected basic food items to a new duty rate of zero percent.
Food items that will have zero duty will include white rice, brown rice, tinned fish including sardines, tuna and mackeral, other canned fish and crude oil. Consumers will not have to pay any duty on these items from next month.
Bole has also announced that the interim government will also remove VAT from locally produced eggs for local consumption in an effort to ensure that people in the lower income bracket and those living at subsistence level have access to protein in their diet at affordable prices.
Bole said cabinet's decision yesterday was part of the interim government's efforts to mitigate the current rise in food prices for the low income earners. He said there has recently been a global increase in the prices of consumable goods, which has been mainly caused by a rise in fuel prices, a switch to bio fuels, and investment in commodities' future.
Meanwhile Finance Ministry officials say the loss in income tax and duty after this decision will not be felt as tax revenue collections have surpassed expectations by 21 million dollars.
FIRCA Chief Executive Jitoko Tikolevu has also announced that the tax collection is at an all time high since 2002. Tikolevu said net tax revenue collection for April totaled 102 million dollars, representing an increase of 31.6 percent over the same period last year.
Net income tax collection for the month of April exceeded the forecast by 10.9 million dollars. Net VAT collection for the month of April recorded 38.7 million dollars, representing an increase of 23.7 percent and above the forecast by 8.1 million dollars. Fiscal duty collection also increased by 24 percent on year on year basis and continues to be dominated by collection from mineral fuels, motor vehicles, machinery, meat, beverages and spirits, iron and steel and dairy produce.
$20m Lose For Interim Govt
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