Global Daily Tax News, Fijian Budget Announces VAT Rate Cut, (Jun 30, 2025)

The Fijian Government has announced plans to lower the territory's value-added tax rate, in its newly released Budget.

The VAT rate will be cut to 12.5 percent, with effect from August 1, 2025. It has also announced that e-wallet and associated services will be exempted from VAT, and VAT refunds will be granted to individuals acquiring solar panel technology for installation on their homes, except for solar heaters and standalone solar lighting systems.

Other key measures announced in the Budget include:

• Reduced fringe benefits tax rates for electric vehicles;

• A CGT exemption for the disposal of a first residential property that is co-owned with non-family members;

• An increase to the Non-Resident Withholding Tax (NRWT) rate on insurance premiums from three percent to 3.75 percent;

• The duration of the tax holiday for renewable energy and power cogeneration projects will be doubled to 10 years;

• The income of businesses engaged in carbon trading will be exempted from income tax; and

• A new 25 percent investment allowance will be granted for new investments made by businesses involved in providing a tour activity in Fiji.

Further, the Government has confirmed that tax incentives for work placements, apprenticeship, and part-time workers, and for hiring persons with disabilities will be extended until the end of 2026.

Fiji's tax laws will be amended to ensure CGT applies to share buybacks and similar transactions; and to establish the legal foundation for Fiji's participation in the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Finally, the Budget announces that businesses will be required to maintain a separate e-wallet account for business transactions, and businesses with a turnover of FJD50,000 (USD22,310) or more will be required to register for the VAT Monitoring System (VMS).