Fiji’s 2024-25 budget introduces key policies to support small and medium enterprises (SMEs) and enhance export capabilities, reflecting a significant effort to stimulate economic growth, support local businesses, and attract overseas investment.
To bolster SMEs, the government has introduced several tax incentives, including a reduction in the corporate tax rate for companies listed on the South Pacific Stock Exchange from 20 per cent to 15 per cent. This creates a more favourable tax environment for small businesses looking to expand and innovate. Additionally, the budget rationalizes VAT rates, ensuring essential goods and services remain accessible while maintaining government revenue. Items such as flour, rice, and prescribed medicines will continue to attract zero VAT, reducing costs for small businesses and consumers.
Significant investments in infrastructure, such as the $200 million allocated for public facility maintenance and the completion of the Viria water project, aim to create a more conducive business environment by reducing overhead costs associated with infrastructure deficits. The restructuring of the ICT incentive aligns tax holidays with other incentives to promote technological upgrades and digital transformation within SMEs, helping them become more competitive in the digital marketplace.
The budget also focuses on enhancing Fiji’s export capabilities, crucial for SMEs seeking to expand their market reach. The government emphasises support for export activities through initiatives like the Pacific E-commerce Initiative and the Pacific Multilateral Trade Negotiations Programme, which provide SMEs with better access to international markets and improve their competitiveness.
Targeted support for agriculture and manufacturing sectors, vital for exports, includes reducing fiscal duty on critical inputs like packaging products and raw materials to lower production costs and make Fijian products more competitive globally. To attract foreign investment, Fiji offers several incentives, such as tax holidays for new investments in specialised sectors and a reduced corporate tax rate for new companies listed on the local stock exchange.
The budget outlines incentives to attract overseas investments, including tax holidays ranging from five to thirteen years depending on investment levels, significantly lowering the initial tax burden on foreign investors. New companies listed on the South Pacific Stock Exchange will benefit from a reduced corporate tax rate of 15 per cent, making Fiji an attractive destination for international business ventures. Additionally, import duties on essential goods and inputs for various industries have been reduced or eliminated, including significant reductions in duty for agricultural and food products crucial for manufacturing and processing industries.
