5 Oct 2006

Fiji senator opposes tax exemption for US embassy

5:14 pm on 5 October 2006

There has been scathing criticism in Fiji's Senate of a government Bill designed to give the United States embassy exemption from the 12 percent Value Added Tax on the construction of its new building in Suva.

The minister of finance, Ratu Jone Kubuabola, had earlier revealed that the exemption would enable the US government to claim a refund of about 5 million US dollars on the 36 million US dollar cost of the building.

A senator appointed by the Great Council of Chiefs, Eminoni Ranacau, has told the Upper House that the exemption is substantial and would hit the poor hard.

Senator Ranacau said the amount was significant given the country' precarious balance of trade position, low foreign reserves and economic vulnerability.

He said the state had had to postpone many vital capital projects, maintenance work on infrastructure and development projects because of the lack of funds.

Senator Ranacau said the waiver of Value Added Tax would undoubtedly trigger questions in the minds of the vulnerable poor who comprise over 40 percent of the population.

He said these people struggle daily to pay living costs on which they also pay the Value Added Tax from which the United States government, the most powerful economic juggernaut in the world, would be exempt.