Individuals and companies wanting to import cement from abroad are being offered zero concessions on duty, until September this year.
This follows a recent shortage of cement on the local market, with the temporarily operational halt of Pacific Cement Limited, suppliers of up to 80 per cent of the country’s cement demand.
“We understand that the demand for cement in Fiji is huge at the moment and the Fijian Government is working hard to meet the urgent needs of our people,” noted Visvanth Das, CEO of the Fiji Revenue & Customs Authority.
“Cement imports currently attract a Duty of 32 per cent fiscal, 10 per cent import excise and nine per cent VAT. Following the shortage, the import of cement will now be zero-rated, however nine per cent VAT will still be applicable.”
Cement manufactured and originating from any of the Melanesian Spearhead Group countries (which include Papua New Guinea, Vanuatu and the Solomon Islands) will also quality for duty concessions, as per the MSG Trade Agreement. FRCA noted that this attracts the same rate of Duty, zero fiscal duty and free import excise duty but would be subject to nine per cent VAT.
“These concessions will remain available to all companies and individuals for three months. However, in order to qualify for concession, orders must be placed and consignments must leave the country of origin before the expiry of the three months that is 9 September 2017,” Das highlighted.
“We appeal to the businesses to pass on the duty concession to the consumers.”
Breaches to the concessions, he said, would incur hefty fines and penalties.
“FRCA will be closely monitoring the concessions provided and will also ensure that the same is passed on to consumers.”
Pacific Cement stopped cement production in late May.
“Unfortunately, we’re a bit disappointed with Pacific Cement- they apparently knew about the problem some months back that they would actually stop production but did not see fit to inform the various stakeholders in the market and also Government,” said Attorney General, Aiyaz Sayed-Khaiyum.
He said Pacific Cement had 24,000 tonnes of clinker- the raw ingredient central to cement production. It hasn’t been able to use this due to non-production at its factory, and while Tengy could increase its cement production, it did not have the clinker.
Pacific Cement has therefore agreed to sell its clinker at $147 per tonne to Tengy Cement, which is presently the only other supplier in the market.
“Now this will mean about 14,400 tonnes of cement per month,” Sayed-Khaiyum noted.
“The current demand is essentially driven by the inability for both of the companies to meet the high demand. The current demand is about 15,600 tonnes of cement required a month, for the construction industry in Fiji.
“So, with Tengy getting the clinker, they can produce up to 14,400 tonnes, however it is unfortunately still not enough. And we also believe the demand for cement is somewhat muted because of the production capacity of the two factories.”
Tengy opened in Lami, Suva in 2014, producing Portland cement and general-purpose, blended cement.
As for Pacific Cement, the Attorney-General said they had been informed that it could resume operations in August.
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