PwC: All eyes on State
20 July, 2021, 6:00 pm
The 2021-2022 National Budget seeks to revitalise the country and the economy after the severe impacts of the first and second waves of COVID-19.
These were the sentiments shared by PricewaterhouseCoopers (PwC) Fiji senior partner Nitin Gandhi in the 2021-2022 PwC Fiji National Budget Report.
He said the budget built on the strategy from last year, aimed to further improve the ease and cost of doing business, maintain tax law changes and stimulate investment.
Government’s three key objectives of the budget were stated to be protection from the virus, vaccinate to achieve herd immunity, continue to support those hardest hit and future-proof Fiji against future pandemics as well as the effects of climate change, diversify the economic base beyond tourism.
“COVID-19 mitigation along with vaccination is central to the Government’s recovery strategy,” he said.
“Full vaccination of 80 per cent of the eligible population of 587,000 by October 31, 2021 is a key government target.
“The budgetary measures may be reviewed in six months should this target not be achieved.
“The Government has opted to maintain civil service pay levels but reduce costs by putting a freeze on new recruitments, strengthening controls over its expenditure and making government processes more efficient.”
Mr Ghandi stated it had forecasted total revenue for the new financial year at $2.1 billion and expenditure at $3.7 billion, resulting in a net deficit of $1.6 billion or 16.2 per cent of GDP.
“The projected debt level is now estimated to be $9.1 billion or 91.6 per cent of GDP.
“Specific allocations have been made for unemployment support, providing financing and other benefits to support small to large businesses and the informal sector.”
These were the information communication and technology/business process outsourcing incentives, including incentives for new cable connections, online systems development and connectivity incentives.
There were also tourism incentives for new and existing properties like Tourism Fiji marketing and sugar pricing guarantees in agriculture.
The micro, small and medium enterprises incentive including financing support was also welcomed.
The Double Taxation Agreement reviews with Australia and New Zealand and alignment with international norms including withholding tax on professional fees and tax amnesty on penalties was highlighted.
As well as improving the ease and cost of doing business including the VAT monitoring system being deferred, implementation incentives and waiver of certain business licences and other fees.
The recycling sector incentives and a new scheme which would provide jobs for unemployed Fijians under a ‘Jobs for Nature’ initiative were praised.
“Local and foreign investment will be critical for the creation of jobs and economic revival. Growing the economy is the key to both budget restoration and funding structural expenditure programs.
“All eyes will remain on Government to rise to its goals and implement reforms with urgency,” he said.