Fuel concessions and NCT exemption for airport project contractor

Minister of finance and Infrastructure Crossley Tatui says that the government is still finalising the agreement for the re-sealing of the airport runway project.

The agreement is between the government, the New Zealand Ministry of Foreign Affairs and Trade (MFAT) and the contractor Downers New Zealand.

Minister Tatui says that there are some things that need to be ironed out still, but the government has approved some of the requests from Downers New Zealand.

“The government has agreed and approved to forego the payment of NCT for the Downers equipment and assets including the selling of fuel at wholesale price, for the whole project operation and duration”.

This means that the contractor Downer New Zealand will not be paying the Niue Consumption Tax (NCT) on all their equipment and assets brought to the island for the project. The fuel concession means that the Downer’s will only be paying the wholesale price from the government’s fuel importer Bulk Fuel. Downers will not pay the fuel charges at the local petrol station which includes the fuel levy for road maintenance, that everyone else pays.

When asked if this was a sound decision given the governments financial predicament with the impacts of COVID 19 and the $4.7 million budget deficit, Minister Tatui said that this is one of those times that they need to spend money to make money.

“Because of the number of workers expected to come to the island so there will be benefits in terms of them spending money locally.”

It is unclear at this stage the value of these concessions as the government is still considering some of the contractor’s requests.

The government have not yet approved the contractors request for exemption of Pay as you earn (PAYE) income tax for their employees.

Some of the Downers employees will be on the island soon to have a look at accommodation options for their workers and working on project logistics.