The reduction in VAT from 15% to 12.5% which is effective from 1st August 2025 is a bold policy decision by the Coalition Government to ease the cost of living for Fijian households.
This was highlighted by Deputy Prime Minister and Minister for Finance Biman Prasad during his ministerial statement in parliament.
He says the VAT cut is expected to deliver $250 million in savings across the economy and it directly boosts the purchasing power of low and middle-income households.
Professor Prasad says Fijians are now paying 2.5% less VAT on electricity tariffs, fuel, food items not zero-rated, Government fees, LTA levies, passports, police clearances, and more.
He says the reduction complements the zero-rated VAT on 22 essential items, including prescribed medicines.
Professor Prasad says since February 2025, inflation has been in the negative territory for seven consecutive months, with August recording -3.5% compared to 3.8% in August last year and lower prices have been recorded in food, beverages, transport, and fuel.
He says to protect consumers, government has also established the Price Monitoring and Enforcement Taskforce working with FCCC, Consumer Council of Fiji, and FRCS to ensure businesses pass on VAT savings fairly.
This reform reflects the Coalition Government’s commitment to reducing cost-of-living pressures, promoting fairness, and supporting every Fijian household.
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