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Fiji Announces Tax Cuts As Part Of 2016 Budget

by Jason Gorringe, Lowtax.net, London
13 November, 2015

A number of tax measures have been announced in the latest Fijian Budget, the most notable of which will see VAT reduced from 15 percent to 9 percent.

The VAT reduction will take effect from the start of 2016 and, at the same time, the new rate will be applied to a number of previously exempt items (staple goods, kerosene, prescriptions and repeats, and imported fish supplied to fish processors). In order to enforce compliance, the Government will look to re-introduce a 300 percent VAT penalty.

Companies looking to relocate their headquarters to Fiji will be eligible for a 150 percent tax deduction for capital expenditure, and the jurisdiction's Tax Free Region will be expanded.

Service providers will see an increase in the service turnover tax from 5 percent to 10 percent, while a new environmental levy will be introduced at a rate of 6 percent. The Short Life Investment Package (SLIP) will cease applying to hotels from 2017, with the exception of new hotels who will receive SLIP, along with a tax holiday, for their first four years. A further 10-year tax holiday is being offered as an incentive to those setting up private hospitals.

An amnesty has also been announced to Fijian citizens who have not fulfilled their tax obligations by filing missing returns and correctly paying the due taxes for previous taxable periods. Late lodgement and late payment penalties will be waived in full for anyone who voluntarily pay their due taxes by the end of December 2015.

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