SUVA – The government of Fiji is taking action to eradicate poverty in the country by lowering taxes for almost all of the nation’s taxpayers.
Over the weekend the Prime Minister of Fiji Frank Bainimarama made his annual budget address in Suva, announcing a number of tax changes aimed at lowering tax burdens for the majority of taxpayers, and raising taxes for the country’s highest earners.
From the start of next year, the tax threshold in Fiji will be raised to FJD 15 600, from the current level of FJD 15,000. All earnings above the threshold, and up to a level of FJD 22,000 will be taxed at a new rate of 7 percent, compared to the current rate of 25 percent. Earnings exceeding FJD 22,000 will be levied at a rate of 20 percent. Corporate income taxes will be also reduced to 20 percent, down from 28 percent.
In his speech, the Prime Minister claimed that the new tax changes would directly improve the financial situation of 99.4 percent of Fijian taxpayers. By the government’s estimates, the alterations to the personal income tax rates will result in approximately FJD 53 million of reductions in individuals’ personal tax obligations.
The tax reductions were instated with the explicit aim of lowering inequality and poverty levels in Fiji. The Prime Minister announced that in order to further this goal, from the start of 2012 all taxpayers with incomes exceeding FJD 270,000 would face a social responsibility levy on their incomes.
The revenues garnered from the levy would be used to compensate the government for revenue losses arising from the tax reductions, and would also contribute to expansion in national anti-poverty campaigns.