For what many know as “ECAL Tax”, and despised by Fiji Opposition Party, ECAL has been a major contributor to Fiji’s revenue.
So what is ECAL?
ECAL is Environment and Climate Adaptation Levy.
Minister for Economy describes it a consortium of taxes on prescribed services, items and income.
“It helps fund critical work across Fiji to protect our natural environment, reduce our carbon footprint, and adapt our economy, our communities and our infrastructure to the worsening impacts of climate change. When you spend time in Fiji, and pay ECAL, you are helping us secure our future by boosting our climate resilience and reducing our national greenhouse emissions.”
Proceeds from ECAL are used to finance selected projects programmed in the National Budget.
Since its introduction in the 2017-2018 financial year, the Environment and Climate Adaptation Levy has collected FJ $270.2 million in proceeds of which FJ $255.9 has been used to finance 102 projects to date programmed in the National Budget to address climate change and environmental conservation.
This innovative fiscal financing tool has helped raise unprecedented levels of public finance to support climate change and environmental conservation programmes.
To enhance community level actions to manage the impacts of climate change, the Fijian Government says that it will soon allocate a certain percentage of ECAL proceeds into a Climate Change Relocation Trust Fund to help raise bilateral and multilateral donor funding to relocate low lying vulnerable coastal communities facing the brunt of climate change.
ECAL is collected by the Fiji Revenue and Customs Services (FRCS) and administered by the Ministry of Economy in accordance with the Finance Management Act 2004 and the Financial Instructions 2010.
At the end of the third quarter of the 2018-2019 financial year, a total of FJ$119.7 million ECAL funds has been collected.
ECAL is collected from five different sources and government upon the the success of this levy has implemented new policies surrounding ECAL.
Through ECAL, the government of Fiji has successfully funded several projects in rural Fiji.
Nakoso Village, a small rural community in Cakaudrove province now has access to clean and safe drinking water after the commissioning of a new water intake dam, a tank base with 10,000 liters of water storage that connects piped water to every household in the village which was funded through the revenue gained from ECAL.
$6.7 million was used from ECAL proceeds as at 30 April 2019 to deliver communitybased, tailor-made water reticulation solutions that include modern catchment systems, portable treatment plants and innovative ecological purification systems (‘EPS’).
Approximately FJ $1.6 million ECAL funds were used from the 2018-2019 allocation for the Vakabuli – Paipai Bridge Crossing project through the Upgrading and Replacement of Bridges programme administered by the Fiji Roads Authority.
A total of FJ $20 million has been used from the ECAL in the 2018-2019 financial year to fund other similar projects under this programme.
Moreover, the Fijian Government began the construction of a stone masonry seawall in front of the skeleton of the old seawall. Once completed, this new development will tremendously improve the structural integrity of the existing seawall and create another layer of coastal protection built to modern and resilient engineering specifications. To negate the issue of coastal inundation, the new seawall is approximately 2.5 meters above sea level, building badly needed resilience in a highly vulnerable community.
This project is also being funded through ECAL.