Fiji: Tax developments in response to COVID-19

This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).

The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.

Authorities in Fiji have introduced a range of measures to mitigate the impact of COVID-19, including:

Tax Administration

• Waiver of all late lodgement penalties incurred after 1 April 2020 until 31 December 2020
• Implementation of the VAT monitoring system (VMS) deferred to 1 January 2021
• VMS applicable to gross turnover of more than $100,000. Taxpayers who voluntarily register for VAT (gross turnover less than $100,000) will not be captured for VMS

Income Tax

• New hotel investment incentive package introduced. Income tax holiday of 5, 7 or 13 years, depending on level of capital investment to the end of 2022 or standard allowance of 25 percent.
• Export income deduction increased from 50 percent to 60 percent from 2020 to 2022.
• Business losses up to $20,000 to be deductible against employment income.
• Certificate of exemption to be reintroduced for Contractors Provisional Tax.
• Advance tax payments relaxed to nine payments at a rate of 11.1 percent per month.
• Penalties on estimated tax to be removed up until 31 December 2020.
• Debt forgiveness for any and all outstanding debt by associated companies to not be subject to income tax effective from 1 April 2020 to 31 December 2020.
• Thin capitalisation rules to be suspended up until 31 December 2020.
• 300 percent tax deduction for donations to the Government’s COVID-19 donor fund.
• 300 percent tax deduction for wages and salaries paid to employees who are selfquarantined and approved by the Ministry of Health. Family Care Leave to be utilised first.
• Employment Taxation Scheme (ETS) incentives for first full-time employee and student apprenticeships to increase from 200 percent to 300 percent. ETS incentives for employees with disabilities employed for three years will increase from 300 percent to 400 percent.
• 100 percent write-off up to $10,000 available on the purchase of fixed assets up to 31 December 2020.
• 100 percent write-off granted for the construction of new commercial and industrial buildings, approvals to be granted before 31 December 2020.
• Tax deduction given to cover any rental reductions made to existing commercial contracts, from 1 April 2020 to 31 December 2020.
• The processing of applications and pending payments under the Film Fiji tax rebate on hold until the COVID-19 pandemic passes.

Value Added Tax

• VAT exemption on imports for a range of medical supplies and equipment, effective immediately.

Customs Acts 

• Warehousing period extended to 12- months with extension provision introduced.

Customs Tariff Act

• Reduction in fiscal duty on essential medical supplies to zero percent.
• Gradual increase in fiscal duty on the importation of diesel and petrol by 20 cents per litre.

Stamp duty

• Removal of $10 stamp duty on export air waybills.
• Reduction of stamp duty for Fiji residents on mortgages from 1.75 percent to zero percent.
• Reduction of stamp duty for foreign nationals on mortgages from 5 percent to zero percent.

Additional information regarding employment-related measures, economic stimulus measures and other measures.