Committee suggests Government review WRT

Fiscal Review Committee. Picture FIJI GOVERNMENT

THE Fiscal Review Committee is recommending that the Government explore reviewing the Water Resource Tax (WRT) that was introduced in 2009.

WRT is imposed on “any business extracting water in its natural state” where a “business” extracts 10,000,000 litres of water or more in a month, that person or business is required to pay WRT at the rate of 18 cents for every litre (that is, going back to the first litre) of water extracted in that month.

“As such, the WRT structure is regressive,” the Fiscal Review Committee said in its report released yesterday.

“The bottled water extraction industry is dominated by one major water bottler which sells its premium bottled water product around the world, particularly in the United States where it is the largest-selling imported bottled water by volume.

“It is a significant contributor to Fiji exports and WRT.

“WRT has been an important source of Government revenue, contributing around $86 million, 4.2 per cent of total Government tax revenues receipts in the 2022 calendar year.”

The Committee saaid there has been no change in the structure of WRT since it was introduced in 2009 so WRT in general is overdue for review having regard to changes in the industry and the global environment.

“Government should explore, with industry participants, a more progressive tax rate incorporating no more than three bands.

“This is with the aim of encouraging industry growth but not compromising WRT as an important source of revenue for Government.

“The top WRT rate of 18 cents per litre may need to be marginally increased to compensate for losses arising from a more progressive tax rate.

“Government should evaluate the pros and cons of WRT being applied only to water extracted for the purposes of bottling or other modes of packaging for sale vs extraction for other uses to determine the most appropriate WRT mechanism.”

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