The exemption on the 10 per cent capital gains tax introduced by the FijiFirst government in its 2021-2022 financial year has been removed.
In his 2023-2024 National Budget address, Minister of Finance Prof Biman Prasad said this random change to the capital gains tax regime, designed to help a specific set of special taxpayers, ended up costing the Government almost $70 million in lost revenue.
Capital Gains Tax is levied on the disposal of shares held by shareholders before May 1, 2011.
“However, that government also introduced an even more special measure. Any taxpayer who owed capital gains tax from a previous unexempted transaction but had not yet paid it, was now exempted from paying the debt. The exemption did not work in the other direction. If you were a compliant taxpayer and you had paid the tax, you did not get it back. But if you were a taxpayer who owed the tax because you had not paid it, you were suddenly exempted from payment,” he said.
In determined efforts to curb non-communicable diseases (NCD), a domestic excise of 40 cents per kilogram or per litre and import excise of 15 per cent will be introduced on juice which includes carbonated drinks, Frubu, Tampico, Just Juice and Marigold), ice cream, sweet biscuits, snacks, and sugar confectionery.
“We are going to increase the excise tax on alcohol and tobacco by 5 per cent while the excise on carbonated / sugar-sweetened beverages will be increased from 35 cents per litre to 40 cents per litre.”
Motor vehicle import excise duty will increase on all new and used passenger vehicle by an additional 5 per cent. Departure tax will increase from the current $100 to $125 effective from 1 August 2023 and will further increase by an additional $15 to $140 effective from 1 January 2024.
“This will add a total of $30m towards overall tax revenues. We are signalling these increases as early as we can so that the tourism industry can plan for them in their wholesaling and other commercial arrangements.”
