Fiji’s National Budget 2019-2020 was announced last week with no major surprises to the economic outlook. However, a number of reforms focusing on promoting financial stability, strengthening anti-money laundering (AML) initiatives and improving the ease of doing business are tapped to assist the economy.
The revised growth forecast is targeting a 3% growth over the next 2 years with budget deficit at 2.7% of the GDP. National debt as a percentage of GDP for this period is forecasted to be at 47.1%, compared to a revised figure of 46.7% for the previous year.
In maintaining consistency for a stable business environment, there were no significant changes announced in corporate or indirect taxes and the exchange control measures remained same as well. There are a few changes worth a mention including the re-introduction of export income deduction at 50% applied retrospectively from 2018 until 2020, tax losses carried forward have now been extended from 4 to 8 years and no stamp duty applicable on offshore borrowings.
A number of reform initiatives have been announced including the revision of the foreign investment laws and the Financial Management Act 2004. The Banking Act 1995 will also be revised to better align the Fiji Financial Stability Review Report conducted by the International Monetary Fund in 2018.
Special initiatives have also been directed towards AML and combating terrorist financing with stepping up of AML compliance under the Financial Transactions Reporting Act and the review of the regulations around the strengthening of transparency and beneficial ownership of organisations. These moves are a positive step to address concerns held by the European Union which recently placed Fiji on its blacklist of tax havens. Click here to access our article for more information on this.
The budget also announced a new website portal to be set up for business registrations online – a move that will be extremely welcomed by the business community as this would set to revolutionise the ease of doing business in Fiji as currently Fiji lags behind a number of its Pacific counterparts when it comes to online registries.
The five key areas highlighted by the Government in this National Budget include law and order, protecting the environment, empowering youth, technology and innovation, and building certainty. Together the specific reform initiatives targeted will strengthen these key areas for development in Fiji.
For more details on Fiji’s National Budget 2019-2020, you can access the Budget Estimates from the Fiji Government website (Budget Estimates 2019-2020).
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