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The Fiji Government expects to raise up to $1.5million by taxing mineral water for sale by bottled water companies.
According to the 2009 Budget announced today, for extractions up to 4,999,999 litres, 0.11 cents will be levied per litre, 0.22 cents per litre for extractions from 5,000,000 to 9,999,999 litres; and 0.33 cents per litre for extractions of 10,00,000 litres and above.
This water resource tax will come into effect from January 1 next year.
Interim Attorney General and interim Public Enterprise Minister Aiyaz Sayed-Khaiyum said these levies were put in place following lengthy discussions with stakeholders of the mineral water bottling industry.
“The idea of course is that it’s a mineral and therefore, a levy is being made and this has been agreed to by extractors of mineral water,” he said.
Fiji Islands Revenue and Customs Authority chief executive Jitoko Tikolevu said levies for next year would be focussed only on extraction as there were some local companies that were also engaged in bottling of rainwater and tap water.
In a statement, Fiji Bottled Water Institute (FBWI) spokesperson Jay Dayal said given the very difficult current economic climate, the FBWI stood by its commitment to work with the interim Government to find a mutually agreeable solution to the water tax issue.
“We appreciate that Government similarly stood by its agreement with us and we hope that the coming year will result in an even more productive relationship between the bottled water industry and Government,” Dayal said.
Earlier this year, the bottled water companies cried foul when the FIRCA wanted to impose a tax of 20 per cent per litre export and excise duty on all bottled water.
The IG ultimately backed down and agreed to negotiate with the bottlers an amount to compensate the natural resource owners and the State for the usage of local natural resources.
Then interim Finance Minister Mahendra Chaudhry however maintained that tax excise the Government had held back from imposing on these bottling firms was justified.
“Resource owners are entitled to much more than what they are getting and they are not even getting a million dollars. These resource owners receive about $25,000 to $50,000 when they should be getting twenty to forty times much more,” Chaudhry said.
He said the nation lost a lot of money and “bottle companies must make a contribution to the State”.
“They use our infrastructure, import of lot of fuel into the country and we have to move their cargo to the Lautoka or Suva wharf that import huge machines that run into millions of dollars. Our roads are being damaged as a result of these heavy vehicles driving midnight and day.”
Chaudhry said these companies must make a contribution so to maintain local infrastructure and “if they are exploiting our natural resources for commercial gain, a fair share must be paid”.
