The Fiji Islands Revenue and Customs Authority said the actions of the five water bottling companies to shut down operations until further notice and to initiate legal action is uncalled for.
Speaking to Fijivillage, Fiji Islands Revenue and Customs Authority CEO Jitoko Tikolevu said they were still negotiating with the water bottling companies on the matter and were not expecting a move like this.
Audio 7
Plants Close - Hundreds Without Work
Hundreds of people employed in the water bottling industry have been sent home this afternoon as five of the larger water bottling companies have shut down all operations until further notice.
Fiji Water Director External Affairs David Roth confirmed to Fijivillage that over 450 workers have been sent home today and this action has been taken because they have now reached a critical juncture where they can no longer effectively operate their business.
Fiji Water, Aqua Pacific, Island Chill, Viti Blue, Pleass Beverages, and FMF VTY have today filed a lawsuit against Fiji Islands Revenue and Customs Authority seeking an order that the new taxes imposed by FIRCA on its bottled water is unlawful and a stay of the imposition of the tax pending a final hearing.
In a statement Fiji Water said that despite them providing FIRCA and the Finance Ministry with all necessary documentation that proves this tax would simply make doing business impossible, both FIRCA and the Ministry have refused to take any action or even engage in any meaningful dialogue to repeal this tax.
Flour Mills of Fiji Chairman Hari Punja confirms that their water bottling plant operations for FMF VTY have also been shut down until further notice due to the imposition of the new duty.
Aqua Pacific's Managing Director, Mohammed Altaf also confirms has stopped all production and export until further notice and have sent home 30 workers already with more expected to be sent home later this month.
Island Chill Director Jay Dayal confirms that their operations have also ceased until further notice.
"Our company's operations actually stopped on the fourth of July and until today we have not resumed simply because we cannot afford this kind of tax that's been imposed on us and we have got stock sitting in our warehouse. we cannot afford to pay that tax," Dayal said.
"It is simply too much and it is going to drive us out of business if we pay anything as such.A total of 36 workers have gone home in the last 21 days."
Speaking to Fijivillage news on-behalf of the 450 workers of Fiji Water, Praveen Kumar said they are lost and do not not how their families will survive. Kumar said they have not been told when they will return to work and are pleading to the interim government to urgently resolve the matter.
“We just got the bad news today that we all have to go home and the factory is closed. 450 people have been sent home just because this government issue - this 20c per liter - they’re demanding money. And the company can’t offer that much and now we are in a big problem and we don’t know what to do and everybody has gone home,” Kumar said.
“The plant is shut down and we have to wait till further notice and I don’t know when the further notice will come and the government doesn’t want to negotiate with the lawyers or the company executives or anybody and the thing is getting worse day by day. Now we are sent home,” he said.
Finance Ministry has placed 20 cents per litre export duty and 20 cents per litre excise duty on all bottled water. FIRCA CEO Jitoko Tikolevu and the Finance Ministry are yet to comment on the matter.
Interim Finance Minister, Mahendra Chaudhry is currently in a meeting. Stay with us we will have more on this issue later this evening.
Bottling Companies To Wait Longer
The 10 Water Bottling companies in the country will have to wait for another week before the interim cabinet makes a final decision on whether the newly imposed 20 cents per litre excise and export duty on bottled water will remain in place.
Fiji Islands Revenue and Customs Authority CEO Jitoko Tikolevu confirmed that they have scrutinized the submissions from the ten companies and have forwarded their recommendations to the Finance Ministry.
Spokesperson for the ten Companies Jay Dayal earlier raised concerns on the delays by FIRCA and the Finance Ministry in dealing with their grievances and as a result they continue to hold back all shipments and sales of bottled water claiming millions of dollars in losses to the economy daily since making the decision two weeks ago.
The companies have opted not to comment any further until cabinet sits next Tuesday.
Water Bottling Companies To Submit Proposals
The Water Bottling Companies will now make their individual proposals to the Interim Finance Minister, Mahendra Chaudhry regarding Cabinet decision that excise and export duties be imposed on all mineral water bottled locally.
Speaking to Fijivillage News, Spokesperson, Jay Dayal confirmed that they met with Chaudhry, however no resolution was reached and they will now make their submissions on their demands.
"We will prepare our submissions on an individual basis and present them to the minister as soon as possible for him to take it to Cabinet," he said. "He will present our case - we told the minister at a country base of the of the grievances we have and the difficulties we're facing and i'm very hopeful that he'll consider that."
Dayal confirmed the operations and sales of bottling companies remains suspended.
Meanwhile, before walking into the meeting with the water bottlers, Chaudhry said the companies' claims that they could close overnight if the duties remain on the bottled water, seem to be unfounded.
"I will not comment on that. That is something I’ve said - that they are not required to absorb it they can pass It onto their buyers and people who buy this product are people on higher income and they can afford to pay an extra 10 cents on a 500ml bottle, Chaudhry said. "We are not asking them to absorb this cost so there is no question of them going out of business. If we had prohibited them from passing it on to the consumer s then – but it is not a price control item either."
Chaudhry maintains that the water bottlers have other options and they should not keep saying that the imposition of the 20 cents per litre excise duty for bottled water sold locally and 20 cents per litre export duty should be scrapped.
Meanwhile, Chaudhry said he would also raise the issue with the water bottlers on whether they are seriously considering legal action against the interim government for imposing the duty.
Chaudhry said further discussion would be useless if there were already plans to take legal action.
Companies Resume Production 06/07/2008 [17:02
Some water bottling companies have resumed production at their bottling sites today after all production was ceased on Friday due to the new export and excise duty imposed on the sale of bottled water.
Speaking on behalf of the 10 companies, Jay Dayal also confirmed that while water bottling continues, individual companies have decided to hold on to all sales and shipments of their products until the matter is resolved with the Interim Finance Minister.
"Production has been going on in some companies. Because there is an aura of confusion among some bottlers some are thinking the effects will be levied on production and some think the effects will be levied on sales," Dayal said. "These matters have not been clarified by the tax department. For the first time these factories have been under the excise laws. So there is a bit of confusion. That was the reason that the industry met. But prior to our meeting some had already stopped the production because they didn’t know what to do – but that was their own individual decision."
It has also been confirmed that Fiji Water has resumed production while all its sales and shipments remain on hold.
Meanwhile, as the executives of the bottled water companies prepared to meet with the Interim Finance Minister to raise their concerns, Mahendra Chaudhry brushed aside claims by the industry that the taxes are a direct attack against them.
"We will hear them out. It is not unprecedented. There is imposition of the standard factors there – it is nothing new," Chaudhry said. "The decision to introduce this tax was very carefully considered and as I’ve said earlier it’s not a tax on the poor. The industry is not forced to absorb this – if they can’t absorb it they can pass on the cost."
Water Bottlers May Take Legal Action Publish date/time: 07/07/2008 [07:30]
Stakeholders in the Bottled Water industry have indicated that legal action could be initiated if there is no change in the stance by the interim government regarding the new export and excise duty imposed on bottled water.
Spokesperson for the ten water bottling companies, Island Chill Director Jay Dayal said this step may have to be taken to ensure the future sustainability of the industry.
"Suppose, for argumentative sake he’s not prepared to back down on it. We have to by all means go and to seek legal redress because that’ll be the only option open on us. the government cannot simply levy anything they want on us and expect us to comply particularly when it has a very serious regressive effect on the bottler and our customers. We will be driven out of business overnight."
The water bottlers said they are concerned that the Ministry of Finance is again taking exceptionally poor advice to levy a 20 cents per litre excise duty for domestic consumption of mineral water and 20 cents per litre as export duty on bottled water, in a misguided effort to reduce the country's budget shortfall, and to supposedly protect water resources in Fiji.
The ten water bottling companies, which include Fiji Water, Island Chill, Aqua Pacific and Tappoos Beverage, said water from their sources is a completely renewable resource that is constantly replenished by abundant rainfall each year.
The companies said to the best of their knowledge there is no precedent in the world for a product in the water industry to be slapped with this kind of duty and in fact most every other nation encourages exports of this kind with generous incentives.
It said by way of comparison, the carbonated soft drink industry in Fiji is only subjected to a 3 cents per litre excise tax and no export duty.
Bottled Water Execs To Meet Chaudhry Publish date/time: 06/07/2008 [12:05]
The executives of the 10 water bottling companies are again meeting to discuss their next course of action as they prepare to meet with the Interim Finance Minister Mahendra Chaudhry tomorrow to discuss the increased duty imposed on the sale of bottled water.
Fijivillage has received confirmation that a joint statement is expected to be issued by the ten companies later this afternoon on the decisions they have made.
The ten companies ceased all production on Friday following the 20 cents per litre export duty imposed on all the mineral water exports and the 20 cents per litre excise duty on mineral water sold locally.
Meanwhile, Fiji Islands Revenue and Customs Authority chief executive officer Jitoko Tikolevu said they are now closely monitoring the movement of all bottled water held in stock by the ten water bottling companies.
What we’re doing at the moment is going to individual bottling factories and get stocktake done so that we are aware of what’s in the warehouse. We need to update our records so that we know when thing moves in or moves out or moves from one place to another our records can be updated because of the new duty that’s come on board. We will await directives from government.
Chaudhry meets the industry stakeholders tomorrow morning.
Bottled Water Industry Stops Production Publish date/time: 04/07/2008 [19:12]
Stakeholders in the bottle water industry have announced that all production of bottled water will be ceased and over 700 employees will remain without work until a solution is found to their grievances against the new duty imposed on bottled water.
Speaking on behalf of the 10 water bottling companies Island Chill Director Jay Dayal confirms that all production of bottled water will cease until further notice.
Dayal confirms that all employees of Please Beverage, Fiji Water, VTY, Mr. Pure, Island Chill, Aqua Pacific, Diamond Aqua, Tapoo's Beverage, Fresh Spring Limited and Mineral Waters of Fiji have been sent home as the new tax structure makes it highly unprofitable for the industry to bottle water.
The Interim government has imposed a 20 cents per litre export duty on all the mineral water exports and a 20 cents per litre excise duty on mineral water sold locally.
Attempts to speak to Interim Finance Minister Mahendra Chaudhry in the last hour proved futile.
Hundreds To Lose Jobs Over Duty Publish date/time: 05/07/2008 [10:20]
The production of bottled water will be ceased and over 700 employees stand to lose their jobs, until a solution is found to our grievance against the new duty imposed on bottled water.
Speaking on behalf of the 10 water bottling companies, Island Chill Director Jay Dayal confirmed that all production of bottled water will cease until further notice.
Dayal confirmed that all employees of Please Beverage, Fiji Water, VTY, Mr. Pure, Island Chill, Aqua Pacific, Diamond Aqua, Tappoo's Beverage, Fresh Spring Limited and Mineral Waters of Fiji would have to be sent home as the new tax structure makes it highly unprofitable for the industry to bottle water.
The interim government has imposed a 20 cents per litre export duty on all the mineral water exports and a 20 cents per litre excise duty on mineral water sold locally.
