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Export Incentives

EXPORT INCOME DEDUCTION

(The export income deduction is at 40 per cent in 2012. The deduction is available to all exporters except for re-exports.)

“Export income” means net profits derived by a taxpayer from the business of exporting goods and services but excludes re-exports. The export income deduction will only be allowed if the Commissioner of Inland Revenue is satisfied that the export earnings will be remitted in Fiji.      DUTY

SUSPENSION SCHEME


The Duty Suspension Scheme (DSS) belongs to the category of Customs arrangements referred to internationally as "Inward Processing Relief". The Scheme enables exporter’s goods into a customs territory free from payment of import duties (fiscal duty) and taxes (VAT) on condition that the imported goods are intended for manufacturing and processing then exported. In order to take part in this scheme, firms should be engaged in an activity that involves the import of materials and transformation into export products. Agriculture and Mining are excluded from the scheme. The Scheme would entitle exporters to import duty free an amount equal to the proportion of approved imported inputs required to produce exports. This is called entitled Proportion (EP). The DSS, administered by the Fiji Export Council (FEC), is a Government initiative introduced as part of the Investment Package to enable Fiji exporters to use world priced inputs into their products to make them more competitive. In addition to this, it is envisaged that the scheme would release resources tied up with duty and VAT for export products enabling exporters to operate at their maximum potential.   

TAX FREE REGION INCENTIVES


This incentive is applicable to a newly incorporated entity engaged in a new trade, business or manufacture established in the following areas:-

  • Vanua Levu also includes Taveuni, Rabi, Kioa and other islands generally included for government’s administrative purpose)
  • Rotuma; Kadavu; Levuka; Lomaiviti; and Lau
  • Any company may apply to the Minister for Finance in a prescribed form for an operating license.

Criteria Grant of License          
 
  • The company is a newly incorporated entity engaged in a new trade, business or manufacture.
  • The minimum initial level of investment should be $250,000 from 1 January, 2010.
 
Tax Exemptions Available
 
  1. The income investment of any new activity approved and established between 1 January 2010 to 31 December 2014 shall be exempted from tax as follows:
·         Capital investment from $250,000 to $1,000,000, for a period of 5 consecutive fiscal years; or
·         Capital investment from $1,000,000 to $2,000,000 for a period of 7 consecutive fiscal years; or
·         Capital investment above $2,000,000 for a period of 13 consecutive fiscal years.
 
  1. The income of any new ativity approved and established from 1 January 2015 shall be exempted from tax for a period of 13 consecutive fiscal years with an initial capital investment of $2,000,000 or more.
 
Duty Exemption
  • Import duty exemption on the importation of raw materials, machinery and equipment (including parts and materials) for the establishment of the business in the Tax Free Region.
 
Other Benefits of Under the Tax Free Region
 
  • Additional 5 years of income tax exemption is available to any company granted a license and having Indigenous i-Taukei landowner equity of at least 25 percent.
  • Additional 7 years of income tax exemption is available to any hotel developer granted a license and having indigenous Fijian landowner equity of at least 25 percent.
    Fastest Growing Exports
 
Fiji's main exports are sugar, garments, gold, timber, fish, molasses, mineral water and coconut oil. Other domestic exports that have increased for the past five years are ginger, flour, taro and sweet biscuits. The main export destinations are USA, UK, Australia, New Zealand, Japan and other Pacific island countries. The main import items are manufactured goods, machinery, petroleum products, food and chemicals from Indonesia, Singapore, Australia, NZ and China.
 
On merchandise trade, Fiji’s total exports in 2009, was $1, 230 million out of which $895 million were from domestic exports. Compared to the corresponding months of 2008, total exports fell by 19.6 percent due to lower receipts from re-exports of mineral fuels and low earnings from sugar, mineral water, woodchips, garments, uncooked pasta, flour, and taro. However, in 2010, exports are projected to grow by 8.9 percent driven by high earnings anticipated from re-exports, gold and fish. The rebound is also consistent with the recovery of external demand as global economy recovers.


Fiji's Major Domestic Exports 2005 - 2009: (F$ million)

Domestic Exports
2006
2007
2008
2009
2010
Sugar
215
185
248
187
70
Fish
98
101
134
157
206
Garments
95
97
100
84
96
Mineral Waters
87
105
109
80
119
Gold
43
3
27
40
89
Sweet Biscuits
18
20
26
34
24
Molasses
19
10
14
21
23
Taro
21
24
22
20
24
Flour
11
13
19
18
23
Woodchips
13
27
28
11
39
Ginger
5
5
5
6
6
Source: Fiji Bureau of Statistics

 

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