Wednesday, December 5, 2007

Tax privileges

Letter to Editor -, 5 Dec 2007

Dividends from Fijian Holdings Unit Trust

A lot have been said and published in the media recently about tax privileges to Fijian Holdings Limited and Fijian Holdings Unit Trust. It is unfortunate that FHL and Fijian Holdings Unit Trust had been singled out, although the removal of tax exemption announced in the 2008 Budget Address was applicable only to the Unit Trust of Fiji. I therefore offer the following for the purpose of clarification.

Fijian Holdings Unit Trust was established in April 2001 to provide another investment opportunity to the growing investor communities in Fiji. It is open to all communities in the country and because of its low-entry level and competitive return it has become very popular particularly to our rural-based investors.

To imply that the tax exemption was enjoyed only by FHL shareholders and unit-holders of Fijian Holdings Unit Trust is a mis-statement. The fact is, all dividends paid out by the 16 companies listed on the stock exchange (and FHL is only one of them) are exempt from tax because the income has been subject to tax at the company level.

Similarly all unit-holders in the Unit Trust of Fiji, Colonial State Funds and the Fijian Holdings Unit Trust are enjoying the same privileges. These measures were part of the Government's policy to grow the capital markets in Fiji, which is consistent with measures taken in other developed markets. Funds under management in these locally-registered unit trusts have grown from over $60million in 2001 to close to $180million at end of 2006. Unit-holders in the Fijian Holdings Unit Trust only account for 21 per cent of the total 14,000 unit-holders in all the unit trusts in Fiji who enjoy such privileges.

Information with regard to dividend paid to the shareholders of FHL is available for public record at the Companies Office. Suffice to say that the company pays dividend at a rate of 20 cents per shares for A-class shareholders and 10 cents per share for B-class shareholders.

In conclusion, FHL and Fijian Holdings Unit Trust reiterate that their affairs are being conducted in accordance with law and for the benefit of their members. The companies will pursue legitimate commercial goals, and will continue to support the enhancement of the nation's economic stability in Fiji.

Jaoji Koroi
CEO - Fijian Holdings Trust Management Limited

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