The Minister for Economy, Mr Aiyaz Saiyad Khaiyum while delivering his National Budget address has announced that ECAL and fiscal import duties will now be imposed on Hybrid vehicles in order to control number of cars on Fiji roads.
The significant increase in vehicle ownership in Fiji over the years has been attributed to lower fiscal import duties on hybrid cars and new nonhybrid cars, which also led to increased socio-economic status of Fijians and contributed to strong economic growth.
While the desired policy goals may have achieved, it has also presented many new challenges, such as serious traffic congestions and high risk of accidents.
These have increasingly disrupted productivity and made road upgrade works very challenging.
The tariff on new hybrid cars has remained at zero for a long time, while a small fixed duty on used hybrid cars was introduced two years ago.
To control the flow of vehicle numbers into Fiji, the Minister has now imposed a high fiscal import duty, and ECAL on hybrid cars.
Likewise, to preserve and maintain the preferential tariff difference the following tax structure will be applied to importation of non-hybrid cars. The import excise rate will be reduced from 15% to 5% and a 10% ECAL will be introduced on non-hybrid vehicles. The tax burden will remain the same.