Legislative Action

Fiji: Firms stop work over export duty

The Fiji Times.

ABOUT 720 workers will be affected after the bottled water industry ceased production because of a new tax structure.

The industry yesterday said it had stopped all production.

This is after Cabinet imposed a 20 cents per litre export duty on all mineral water exports and 20 cents per litre excise duty on mineral water sold for domestic consumption.

The industry met yesterday afternoon and decided to cease operations, saying the new tax structure made it unprofitable to continue bottling. The meeting was held in Suva and attended by the Warwick Pleass, Fiji Water, VTY, Mr Pure, Island Chill, Aqua Pacific, Diamond Aqua, Tappoos Beverage, Fresh Spring Limited and Minerals Water of Fiji.

Bottled water industry spokesman Jay Dayal said the water bottled industry "is at a standstill and all the workers will be sent home".

"We cannot produce as we will be taxed. The industry is at a standstill," he said.

Mr Dayal said they would cease production "until we can resolve this extraordinary attack against the bottled water industry".

The industry said "the Ministry of Finance is again taking exceptionally poor advice to levy onerous excise and export duties on bottled water in a misguided effort to reduce the country's budget shortfall and to supposedly protect water resources in Fiji".

The industry said the carbonated soft drink industry in Fiji was only subjected to a $0.03 cents per litre excise tax and no export duty.

"The proposed action will weaken the Fiji bottled water industry's ability to compete in markets around the world," it said in a statement.

Last night, interim Finance Minister Mahendra Chaudhry said the interim Government had made a decision and the tax was already in place.

Mr Chaudhry said the tax was not new and had been imposed in other countries to generate revenue by governments.

"The State has a duty to impose tax and this tax will not hit the poor people," he said.

"The poor people do not buy bottled water," Mr Chaudhry said.

"The bottled water companies do not have to observe this, they can pass it to the consumers," he said.

Mr Chaudhry said the State charged tax for extraction of water for commercial purpose. He said these were tactics used by the business people in Fiji for removal of tax and asking for concessions.

"Mineral water is a scare resource, which will deplete and a fair share of returns has to be passed on to the nation," Mr Chaudhry said.

Nadi-based Crystal Clear Mineral Water has already laid 30 workers, owner Mohammed Altaaf said.