Duty on used cars will be increased by $1,000 while the duty on new cars will be increased by 5 percent.
While announcing the 2022/2023 National Budget, Minister for Economy, Aiyaz Sayed-Khaiyum says the government will also introduce a luxury vehicle tax of $10,000 per vehicle for vehicles above 3,000cc.
To further promote and support the use of green technologies, they are expanding incentives to support the purchase of Electric Vehicles and charging stations.
Government had previously announced a 7 year tax deduction and a 5 percent subsidy for capital investments in charging infrastructure/stations for electric vehicles above $100,000.
The subsidy has now increased to 10 percent on investments over a lower threshold of $50,000.
VAT and fiscal duty on all electric vehicles will now be zero-rated to allow accelerated depreciation of 100 percent. Government will also provide a $5,000 subsidy per vehicle if a local business purchases 5 vehicles or more.
The current employment taxation scheme expires in 2023 and allows for a 300 percent tax deduction on first full-time employees, on wages paid for work placements in a related area of study up to 6 months in a year before graduation, and to students employed on a part-time basis.
The 10 percent reduced rate of corporate tax available to companies listed on the SPSE will only be available for 7 years. Companies that have enjoyed for 7 years or more will now pay the corporate tax at the rate of 20 percent. This will be effective from Tax Year 2023.
A 100 percent tax deduction will be available to companies on the amount of tuition and living expenses paid for student(s) at a higher education institution specified in the Higher Education Act 2008.
The deduction applicable for the purpose of living expenses is limited to $7,000 per calendar year and must be paid into a bank account held at a commercial trading bank under the name of the student.
The 150 percent tax deduction available to hotels and resorts that hire local artists such as craftsmen, dancers and musicians will be increased to 300 percent.
Sayed-Khaiyum has also revealed that the Residential Housing and Development Incentive Package will be further incentivized.
A 50 percent developer profit exemption will be available to projects with a minimum investment level of $5 million and at least 10 residential units. Customs concession (zero duty) on the importation of capital equipment, plant and machinery. There will be no condition on the sale price.
A 5-year age limit will be imposed on the importation of secondhand petrol and diesel motor vehicles.
This will be aligned to the age limit of 5 years on hybrid vehicles.
The Euro IV compliance requirement will be maintained.
A transitional period will be allowed to import vehicles older than 5 years provided that the vehicle was ordered, paid for or loaded for shipment to Fiji on or before 16th July 2022 and that the shipment arrives in Fiji on or before 31st December 2022.
The government will be phasing out duty protections for Fiji Dairy in the lead-up to the expiration between the Government and Southern Cross Foods Ltd on 31st August 2022.
Duty will be reduced from 32 percent to 5 percent after expiry of the agreement on cheese, yoghurt, and liquid and powdered milk.
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