New Tax System (Soon),

And New Taxes (Now)

From a Suva correspondent

The speech in which Fiji’s Minister of Finance, Mr C. A. Stinson, intro duced his 1974 Budget was long on words but short on details.

Mr Stinson spoke of the general principles that are to be applied in the new system customs tariff that comes into effect on January 1, but importers will have to wait till late December before they know what the charges will be on specific items.

The minister announced that Fiji’s income tax system is to be overhauled but did not cross the t’s or dot the i’s of the changes. These must wait till an-as-yet-unfinished bill is pub lished at some unspecified date.

The government hopes that the new system will become law in April, 1974, though the tax year for most people begins on January 1. April is also the appointed date for the be ginning of a new turnover tax of three per cent on hotel accommoda tion, food and beverages, but hotel owners are still uncertain whether they are expected to bear the full burden of the tax or whether the price control authorities will allow them to pass it, or some of it, on to customers.

His survey of government accounts, past and future, was unusually brief.

The 1973 estimated deficit of $721,000 is expected to be almost doubled by rising costs, in spite of a boost of nearly $5,000,000 in the estimated revenue for the year.

The 1974 estimates aim at a sur plus of $446,920. The estimated ex penditure is a record $73,527,780, with a further $27,510,734 provided for capital works.

Social services will absorb 36.1 per cent of government expenditure in 1974. Education will account for 22.2 per cent and health services for 10.2 per cent.

About 40 per cent of the money spent will be needed for civil service emoluments. Mr Stinson announced that a maximum annual growth rate of 5 per cent on the number of civil servants is to be enforced.

Another announcement—that no new government cars will be bought in 1974—was translated in an ABC news bulletin into a declaration that Fiji will ban the import of all new cars next year.

Drinkers and smokers, who now bow their heads and bare their necks automatically as budget time ap

proaches, received the expected and customary blow. Higher excise duties cn beer and cigarettes and higher import duties on beer, spirits, wine, tobacco and cigars will produce most of the additional revenue on which Mr Stinson is relying to balance his budget.

The major change in the customs tariff is to be its conversion to a one-line system—so-called because there will no longer be separate duty rates for goods from British Com monwealth and non-Commonwealth countries.

In general, Mr Stinson said, food, industrial raw materials, tourist items and goods used by rural people will be admitted at low rates or no duty.

Examples of “rural” goods exempt from customs duty are fishing nets, primus and similar stoves, outboard motors and kerosene refrigerators.

Fertilisers and a wide range of dairying, agricultural, horticultural and poultry-keeping machinery will be exempt from both customs and fiscal duty.

Income tax will begin at 545 (with a $3O rebate) on a chargeable income of $6OO and will mount in steady progression to $3,820 on a chargeable income of $12,000, with anything above $12,000 being taxed at the ceiling rate of 50 per cent. The basic tax of 2i per cent of gross income is additional.

Local company tax, which was converted from the pre-decimal cur rency rate of 6/3 in the £ to an untidy 32.6875 per cent, is to be raised slightly to the more easily calculated one-third.

The Opposition early seized on a proposal to do away with the present $640 personal allowance and replace it with a $3O tax rebate. The present additional married allowance of $640 is to be converted to a total of $750 for a married couple.

This, said the government’s critics, means discrimination against the lower-paid taxpayer while those with higher incomes are being given tax relief.

In reply, the government has pointed to such things as higher tax exemptions for savings bank interest and a new allowance for the cost of board for children at school or uni versity. There have been hints, too, of customs tariff concession goodies in store, especially for low income people.