"As finance minister in 2008, I confronted Fiji Water for shortchanging the government by declaring a lower value for exports to its parent company in the United States. I also proposed the water resource tax which was later adopted by the Bainimarama administration . I also declined a request for extension of its 13 year corporate tax exemption granted by Rabuka’s SVT government in 1995. As a result, Fiji Water was paying both the taxes. Is it a coincidence that the company should reclaim its tax exemption with the return of Mr Rabuka as Prime Minister? Unfortunately, Minister Prasad too appears to have fallen prey to the shenanigans of this company." FLP leader Chaudhry
Finance Minister Biman Prasad’s defence of corporate tax exemption for Fiji Water and other water bottling companies is fraught with inaccuracies and a lack of knowledge about the workings of these companies.
He questions from where I got Fiji Water’s profit of $63m for 2022. It is, of course, from the 2022 accounts of the Company filed with the Registrar of Companies, and taxed at 25% would fetch $16m.
Corporate tax paid by bottled water companies in 2022 was around $5m, as stated by Prasad, because they paid at the rate of 10% only after claiming 10% export tax subsidy.
Subsidies, concessions and exemptions granted to well established profitable companies over long periods cannot be justified.
These cost us tens of millions annually and are strongly advised against by international financial institutions.
It is a pity that being a professor of economics, Prasad fails to grasp that Water Resource Tax (WRT) and Corporate tax are two distinct taxes and they must be so treated.
He is either confused or deliberately misrepresenting facts to defend the exemption decision which is both iniquitous and anomalous.
It has upset local manufacturing companies which are required to pay both excise (the equivalent of WRT) and corporate tax.
The people of Fiji are entitled to a fair return on their resources exploited for commercial profit. It just cannot come free.
An increase in the WRT was overdue, as the current rate of 18c per litre was determined in 2017. Since then Fiji Water has increased its retail price a number of times. Surely, as the custodian of these resources, the State is entitled to similar consideration.
As finance minister in 2008, I confronted Fiji Water for shortchanging the government by declaring a lower value for exports to its parent company in the United States.
I also proposed the water resource tax which was later adopted by the Bainimarama administration .
I also declined a request for extension of its 13 year corporate tax exemption granted by Rabuka’s SVT government in 1995.
As a result, Fiji Water was paying both the taxes. Is it a coincidence that the company should reclaim its tax exemption with the return of Mr Rabuka as Prime Minister?
Unfortunately, Minister Prasad too appears to have fallen prey to the shenanigans of this company.
Finally, it is unbecoming of the minister to resort to personal attacks against his critics.
Such tactics are abhorrent and do not settle arguments. I, therefore, invite him to a live public debate on the matter. I believe that is the best way to bring it to finality in the public eye.
He questions from where I got Fiji Water’s profit of $63m for 2022. It is, of course, from the 2022 accounts of the Company filed with the Registrar of Companies, and taxed at 25% would fetch $16m.
Corporate tax paid by bottled water companies in 2022 was around $5m, as stated by Prasad, because they paid at the rate of 10% only after claiming 10% export tax subsidy.
Subsidies, concessions and exemptions granted to well established profitable companies over long periods cannot be justified.
These cost us tens of millions annually and are strongly advised against by international financial institutions.
It is a pity that being a professor of economics, Prasad fails to grasp that Water Resource Tax (WRT) and Corporate tax are two distinct taxes and they must be so treated.
He is either confused or deliberately misrepresenting facts to defend the exemption decision which is both iniquitous and anomalous.
It has upset local manufacturing companies which are required to pay both excise (the equivalent of WRT) and corporate tax.
The people of Fiji are entitled to a fair return on their resources exploited for commercial profit. It just cannot come free.
An increase in the WRT was overdue, as the current rate of 18c per litre was determined in 2017. Since then Fiji Water has increased its retail price a number of times. Surely, as the custodian of these resources, the State is entitled to similar consideration.
As finance minister in 2008, I confronted Fiji Water for shortchanging the government by declaring a lower value for exports to its parent company in the United States.
I also proposed the water resource tax which was later adopted by the Bainimarama administration .
I also declined a request for extension of its 13 year corporate tax exemption granted by Rabuka’s SVT government in 1995.
As a result, Fiji Water was paying both the taxes. Is it a coincidence that the company should reclaim its tax exemption with the return of Mr Rabuka as Prime Minister?
Unfortunately, Minister Prasad too appears to have fallen prey to the shenanigans of this company.
Finally, it is unbecoming of the minister to resort to personal attacks against his critics.
Such tactics are abhorrent and do not settle arguments. I, therefore, invite him to a live public debate on the matter. I believe that is the best way to bring it to finality in the public eye.
CENSORED: Recently, we noticed that NFP had NOT reproduced Professor Wadan Narsey's opinion on the Fiji Water tax saga. We concluded, and as we informed Narsey, it was because of his stinging criticism of the concession to Fiji Water.
*Moreover, Prasad dared not to attack Narsey, once slated as Rabuka's Finance Minister-in-Waiting if the SVT-NFP Coalition had won the 1999 election that year.
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Academic Professor Wadan Narsey has questioned why a seven-year tax holiday for existing and new water bottling companies was included in the 2023/2024 National Budget.
Speaking virtually during a post-budget forum organised by Dialogue Fiji on Wednesday, Prof Narsey said while he welcomed most of the provisions in the budget, there was scope for improvement in other areas.
“To exempt them from income tax for seven years, which will be applicable to existing and new businesses, raises the question – why are we suddenly picking on this industry?” he said.
“They have already been making very good profits for more than 20 years.”
Speaking virtually during a post-budget forum organised by Dialogue Fiji on Wednesday, Prof Narsey said while he welcomed most of the provisions in the budget, there was scope for improvement in other areas.
“To exempt them from income tax for seven years, which will be applicable to existing and new businesses, raises the question – why are we suddenly picking on this industry?” he said.
“They have already been making very good profits for more than 20 years.”
