Fiji’s Prime Minister, Sitiveni Rabuka, denies that the 7-year tax holiday granted to water bottling companies, as announced in the 2023-2024 budget, is a result of favoring a single company and states that the tax concession aims to attract new investors and promote growth in the industry, specifically in Tailevu, Ra, and Ba.
He asserts that the government will generate revenue from these companies through the increased water resource tax of 19.5 cents per litre (up by 1.5 cents per litre) – that despite being exempt from corporate tax, water bottling companies will still incur higher payments through the water resource tax.
Rabuka’s comments come in the wake of criticism, particularly the opposition questioning the rationale behind granting the tax holiday.
Leader of Opposition Inia Seruiratu criticised the decision, arguing that it lacked logic as it appeared to favor only one company. He questioned why the government would forego potential revenue from an entire sector just to provide tax credits to a single company operating in the United States. He also pointed out that when the previous government took office in 2010, Fiji Water already enjoyed a 13-year tax holiday.
Rabuka defends the decision, saying the tax concession is “to encourage new players who wish to enter the industry (Tailevu, Ra, Ba) and existing operators who wish to expand operations.” He said the decision also aligns with his party’s manifesto and discussions with potential investors. Discussions with Fiji Water, he said, centered around other matters.
“These investors stated that Fiji needed a transparent, fair, and equitable tax regime rather than one that penalised some and favored other investors,” Rabuka said.
“I had the opportunity to meet the owners of Fiji Water and other investors on my return from the Oceans Summit in Panama earlier this year. I always take the opportunity to meet foreign investors and Fiji citizens who are interested in investing in Fiji.
“Our discussion with the owners of Fiji Water centered around improving logistic arrangements for transportation of their product to Lautoka wharf, options for renewable energy given the factory is not connected to the EFL grid, possible investment in other key sectors where they have a comparative advantage and a transparent and fair tax system for the water bottling industry.”