The New 2012 Fiji Tax Policy

(Friday 25thth November 2011, No:2133/MOI) The New 2012 Fiji Tax Policy

• Effective January 1, 2012, the Bainimarama Government will reduce or eliminate taxes for 99.4 percent of taxpayers.

• The top income tax marginal rate will be cut from 31 percent to an absolute ceiling of 20 percent.

• RESULT: The Bainimarama Government will put $53.1 million back in the pockets of Fijians.

• Beginning January 1, the corporate tax rate will drop from 28 percent to 20 percent.

• The Government is striving to increase foreign investment; therefore, will eliminate the 40 percent local equity requirement for foreign incorporated companies listed on the South Pacific Stock Exchange.

• The Government is making its progressive tax system truly progressive by increasing the number of brackets from three to 11.

• Any Fijian earning zero to $15,600 will pay nothing in taxes.

• Income between $15,601 and $22,000 will have a tax rate of 7 percent. It was 25 percent. The fixed component is eliminated.

• RESULT: Those earning $20,000 a year now are paying about $1500 in taxes. In the new system, they will pay about $300.

• In the next bracket, between $22,001 and $50,000, the rate will be 18 percent, down from 31 percent. The fixed component has also decreased.
• RESULT: Fijians who earn between $50,001 and $100,000 will have their tax rate reduced to 20 percent. Previously it was 31 percent. The fixed component will also decrease.

• Companies will pay almost all of their advance payment within the fiscal year, but not at once. This reform means 30 percent of taxes will be paid in June, 30 percent in September, and 30 percent in December. The remaining 10 percent will be paid in the following February.

• To curb the problem of tax evasion, penalties will increase and their scope will be extended.

• As of January 1, 2012, the Government is instituting the “Social Responsibility Levy.” This will be applied to anyone earning over $270,000 a year. This will fund food voucher and family assistance programs. In this way the top 1 percent of taxpayers will now be contributing more fully to the social good.

• RESULT: $9.8 million from the “Social Responsibility Levy” will go towards social welfare programs.

For more information on Government events and decisions log onto the official Government portal
www.fiji.gov.fj
Decrees also available!
Fiji Today News at 7pm on MAI TV & Read the Fiji Focus Newspaper every fortnight in the Fiji Sun

ENDS

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