24 Nov 2007

Fiji's interim finance minister announces budget

12:40 pm on 24 November 2007

Fiji's interim finance minister, Mahendra Chaudhry, has announced a 930-million US dollar budget for 2008 the main thrust of which is to keep the deficit at 2% of GDP.

This is in line with his revised budget which was announced in March this year.

Mr Chaudhry says foreign reserves have stabilized and risen by 31-million US dollars to 570-million US dollars, enough to pay for 4.3 months of imports.

He has announced a wide range of measures to boost exports, reduce imports of things like food for the tourist industry, and encourage investment and economic recovery.

Duties have gone up on cigarettes and alcoholic drinks, computers, mobile phones, trucks and trailers, and earth moving machinery.

The import of second hand cars over five years old will be banned.

Hotel turnover tax will be increased from 3% to 5% from April next year and the tax on gambling will also go up.

But duties have gone down on some basic food like chicken, rice, fish and legumes.

Mr Chaudhry has placed strong emphasis on the reduction of public debt which he says had reached unsustainable levels of 1-point-7 billion US dollars under the previous government.

There are significant changes for investment in the hotel industry with new incentives being brought in as the old ones expire next year.

Mr Chaudhry has also placed strong emphasis on good corporate management by making company directors personally liable for the bad debts of businesses which fail or are liquidated.

Directors will also be personally liable for taxes left unpaid by companies which become insolvent or are left with insufficient assets.