The government’s intention, in the June sitting of Parliament, to introduce a Bill that offers exclusive tax exemption to Fiji Television has been strongly criticized by Labour Senator, Dr. ‘Atu Emberson-Bain.
Senator Emberson-Bain says that the upcoming Income Tax (Amendment) Bill No 14 of 2004 should be of serious concern to Fiji’s media industry, the taxpaying public, and the community at large. The Bill proposes to exempt Fiji Television from income tax liability for all income earned after 1st January 1994 up until 1st January 2009. Once the Bill is enacted, Fiji Television will receive a tax rebate of around $2.6 million.
“This exclusive tax holiday for Fiji Television is very disturbing and I am aghast that the government has the gall to backdate the exemption to 1994. It is common to see legislation coming into effect from the 1st January of the year in which it is enacted. But to try to give retrospective legality to a tax exemption that goes back 10 years is outrageous, and quite unethical, particularly when such an action involves such a large amount of public funds and the beneficiary is a single commercial company.”
Senator Emberson-Bain said that it was also of concern that the proposed Bill appeared to be in direct conflict with the views of the Fiji Islands Revenue and Customs Authority. The FIRA concluded last year that Fiji TV was liable for $2.6 million in income tax and tax penalities for the 1994 to 2002 period.
“Why is the government over-ruling the decision of the Revenue & Customs Authority, and going so far as to produce legislation to legitimize this dubious tax deal? And how can it possibly justify this when this company is so profitable. You only need to look at its latest annual report to see that the value of Fiji Television shares has tripled over the past four years, company revenue for 2003 amounted to over $10 million, pre-tax profits for the same year were $3.5 million, and the company paid close to $2.4 million in dividends in just 2002-2003 alone. Where is the justification for an exclusive 15-year tax break?”
Senator Bain expressed concern that the tax exemption proposed by the SDL government could compromise the independence of Fiji TV and be in breach of the Constitution. In view of this, she urged other media stakeholders and NGOs to come forward with their views on the Bill.
“Is this an attempt by the SDL government to buy influence over this monopoly television company, particularly as it will face a national election in the near future? The Bill may also be unconstitutional because it discriminates in favour of just one company. Other local companies are required to pay tax, and within the media industry, this is certainly the practice. Why should Fiji Television enjoy the exclusive benefits of tax exemption, while other private companies like the commercial radio stations and newspapers are obliged to pay tax?”
Senator Bain said that the main financial beneficiaries of the company’s tax rebate and exemption would be its large shareholders, especially Yasana Holdings that holds over 50% of Fiji TV shares. “This raises even more questions about the underlying agenda of the proposed Bill. We certainly need full disclosure and accountability from the government. The public has a right to know what is going on.”