Resource Tax

1.0 Introduction The most valuable, essential and scarce resource in the world is water. The extraction of water for consumption by the bottled water industry has expanded consistently over the years as people perceive bottled water to be much safer than tap water. This perception has led to bottled water companies making millions of dollars from the extraction of this scarce resource. Fiji Water, a Limited Liability Company (LLC), is one such bottled water company that has experienced favourable growth over the last decade. Fiji Water is a company that was established in 1996 and is headquartered in Los Angeles, California (Bloomberg Businessweek, 2011). The company offers natural artesian bottled water which is sourced from an artesian aquifer at the edge of a rainforest and is available worldwide. In November 2004 Fiji Water became a part of Roll International Holdings. It is the second biggest selling premium bottled water in the United States market (Behrmann, 2010). Fiji Water bottles 119 million litres of water annually and paid 1/3 of a cent per litre of water extracted (Sydney Morning Herald, 2010). The company generates more than $130 million in export revenue for the economy of Fiji. Water Resource Tax is levied on the extraction of water in its natural state by any business extracting water for the purpose of bottling or packaging for the sale for human consumption (Fiji Trade and Investment Board, 2010). In early July 2008, the Fijian Government developed the Water Resource Tax promulgation proposing a tax on bottled water in order to generate revenue and possibly improve the country’s budget deficit. A few weeks after the announcement, the tax promulgation had to be abandoned as bottling companies threatened to shut down stating they would not operate under such a tax. The protest would have cost the Fijian economy up to $3 million in lost export revenue. On 26 November 2010, the Fiji Government presented the 2011 National Budget and announced the...