Continuing pandemic will hurt VAT collection down 21.5% – FBC News

The Reserve Bank of Fiji says that if the second wave of COVID-19 is not contained soon, it will weaken the already fragile finances of many companies.

In its latest economic review, the RBF says the continuation of the virus will also further curb consumer activity.

VAT collections have already declined for April, down 21.5%, while new consumer loans are down 20.6%.

The article continues after the announcement

New vehicle registrations were down 2.6 percent and electricity consumption was minus seven percent as all registered annual contractions.

Used vehicle registrations continue to gain ground as they are on the rise again, this time by 152%.

There was a massive 96.4% drop in visitor arrivals before the latest lockdown, as international travel remains severely limited.

The results of RBF’s job vacancy survey through April confirm very low feelings of hiring, with the total number of job vacancies plunging 66.2 percent.

This is explained by the reduction in recruitment intentions observed in all sectoral categories, with the exception of mines and quarries.

In addition, the recent pandemic shock will further affect tax revenue collection and increase government spending commitments.

In the first nine months of the current fiscal year, the government recorded a net deficit of $ 905 million, or -9.7 percent of GDP, with expenditure of $ 2,256 million exceeding revenue of $ 1,351. millions of dollars.

The decrease in revenue of -39.1% or $ 868 million was substantial compared to the decrease in expenses of -11.2% or $ 283.5 million.

In the year to February, the trade deficit narrowed 25.9% to $ 354.4 million due to a larger drop in total imports.

In May, foreign exchange reserves hit an all-time high, surpassing the $ 3 billion mark and currently stand at $ 3,134 million, enough to cover 9.7 months of retained imports.

The RBF again asserts that an economic contraction is likely for this year, while the forecast for 2022 appears uncertain.

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