THERE is an urgent need to stimulate private sector investment to reduce the financial stress faced by the government.
This, according to acting Finance permanent secretary Akosita Drova.
Speaking at the Fiji Commerce and Employers Federation TOPEX 2013 conference in Natadola yesterday, Ms Drova said there was a significant decrease in private sector investment over the past few years
"The private sector is important because it is the engine for sustainable economic growth, foreign exchange generation and government revenue," she said.
She added that government resources were scarce and depended significantly on private sector income through taxes.
"For the private sector to drive growth, the government needs to play a facilitative role.
"There is simply no substitute for a confident, investing and innovative private sector to foster growth."
Ms Drova said government was assisting the private sector with the intention of stimulating investment by increasing capital expenditure on improving infrastructure.
She said debt levels were stabilising and were expected to reduce further with the government's planned fiscal consolidation — citing the example of debt levels at 54.7 per cent or more than $4billion in the 2009 to 2010 year, that was now hovering at close to 50 per cent or between $3.5 and $4billion.
Ms Drova said government had implemented tax policies to assist the private sector by offering a significant reduction in corporate and personal income taxes.
"We have introduced tax holidays for certain sectors, tax-free regions and lower corporate tax for listed companies and companies establishing headquarters in Fiji."
She said this, combined with low Customs duties and concessions for raw materials, machinery and other capital equipment, was aimed at stimulating private sector investment into industrial expansion.