TAX policies are ever evolving and their application now to electric vehicles (EVs) under Fringe Benefit Tax that come into effect on January 1, 2025, is a small part of the entire tax spectrum and should not be seen as defeating Fiji’s efforts to move into clean energy.
This is the view of Deputy Prime Minister and Minister for Finance Biman Prasad when asked why Government has chosen to include EVs in the tax net, which has come under fire from the private sector.
“Tax policies are always policies that evolve, that change and as far as we’re concerned, the government is keenly aware about our role in mitigation,” Mr Prasad told this newspaper last week.
“But for Fiji, the overwhelming priority has always been adaptation.
“We’re not the polluters in the world. We – Fiji and the Pacific – contribute a very, very minute percentage of the total global emission.”
The new tax on EVs require companies to pay up to $16,000 a year in fringe benefit tax for EVs bought at less than $60,000 and over $20,000 a year for EVs that cost over $60,000.
The amount is halved if the vehicles are partly used for employment.
Textile merchant Mark Halabe had told this newspaper that this would be seen as a negative for corporations who wish to buy fleets of EVs to promote clean energy.
“I think there’ll be, hopefully, a review between now and the next budget cycle for the issue to be fixed.
“But seriously, if your company wanted to buy you a company car, they would think twice about giving you an EV because of that constraint,” Mr Halabe said.
Mr Prasad ruled out the review of the tax any time soon.
“It’s a fringe benefit tax,” he said.
“Our tax policies are not just targeted to one type of renewable energy or one type of strategy to reduce emissions. You can’t divorce one little tax policy from everything else as part of Government’s policies.”
“I think Fiji as a country, globally, has done extremely well, as I said 55 per cent of our renewable energy in this country comes from renewable and that’s a huge contribution and we will have more.
“We are supporting solar power, EFL is working on some of those projects so you can’t just say you have this tax on this aspect, they’re all part of our strategy to reduce emissions and as we move on, we will review and change and readjust our tax policies and incentives to support renewable energy further in this country. But right now the statistics is that 55per cent of our energy comes from renewable sources,” Mr Prasad said.
NOTE: This article was first published in the print version of the Fiji Times dated December 23, 2024.
