No major tax hikes as government extends fuel relief

Fiji's government is implementing measures to cushion the economic impact of the ongoing fuel crisis, extending duty concessions on diesel and heavy fuel oil for key industries until October. This relief applies to Energy Fiji Limited, bus operators, hotels, resorts, and mining companies, as well as manufacturing firms using diesel for electricity generation. Furthermore, the government will fully subsidize the recent 22.5 percent bus fare increase, ensuring public transport remains affordable for citizens.

In a bid to stimulate investment and diversify the economy, the upcoming budget introduces several tax incentives. Companies with at least 30 percent iTaukei (indigenous Fijian) shareholding investing in eco-tourism, cultural tourism, and arts-related businesses will be eligible for tax holidays. Investments between $5 million and $10 million will receive a seven-year tax holiday, while those exceeding $10 million will benefit from a thirteen-year holiday. Additionally, a thirteen-year tax holiday is available for new cement manufacturing facilities investing at least $20 million, and a five-year holiday for new mahogany processing facilities investing at least $5 million.

The government is also fostering innovation and financial technology by supporting Peer-to-Peer Lending and Equity Crowdfunding platforms with a five-year tax holiday. Income up to $200,000 annually from licensed P2P lending platforms will be tax-exempt, and qualifying institutional investors and eligible equity crowdfunding investments will receive capital gains tax exemptions. To boost infrastructure, the accelerated depreciation provision for investment in fuel and gas storage facilities will be expanded. The incentive for land subdivision to encourage housing development is extended until July 2030. Tax deductions for sponsorships of the Fijian Drua and Bula FC are enhanced, with a new 150 percent tax deduction for investments in sporting facilities and development infrastructure. Finally, incentives are in place for veterinary and animal welfare facilities, with a 200 percent tax deduction for donations to qualifying organizations. Import duties on flavored milk, plant-based food preparations, and aluminum structures are reduced, while surveillance cameras will be duty-free.