The government has taken some bold decisions to cushion the impact of external price pressures on the cost of living by reducing the Value Added Tax to 12.5 percent from 15 percent.

Deputy Prime Minister and Minister for Finance Professor Biman Prasad says this will come into effect from August 1st.

In his 2025-2026 National Budget address in Parliament this morning, he says this reduction in VAT will deliver tax relief of $250 million to people.

He says this is in addition to the $250 million in relief provided through the continuation of the zero-rated VAT on the 22 essential items.

He says a total of $500 million in VAT relief will be provided to Fijians.

Professor Prasad says some domestic manufacturers and producers have been receiving heavy tariff protection for decades.

He says tariff protection should be temporary, targeted, and transparent.

He says while over the years these protections have been gradually reduced, there are some industries that continue to be heavily protected.

He says they have been seriously reviewing this and, where necessary, they are ready to break these protections for the benefit of our consumers.

He says as a result, they are taking a number of measures in this budget.

Tariff on chicken portions and offals (giblets, liver), which used to receive 42 percent protection, was reduced to 32 percent.

After careful consideration, this is being further reduced to 15 percent in this Budget.

Fiscal duty on frozen fish, including salmon, is reduced from 15 percent to 0 percent, similar to that on canned fish, like salmon and sardines.

Fruits and vegetables such as tomatoes, cabbage, lettuce, cucumber, eggplant, pumpkin, banana, avocados, mandarins, watermelons, and pawpaw will continue to attract only 5 percent duty, while other fruits and vegetables like apples, carrots, grapes, oranges, pears, celery, capsicums, mushrooms, kiwifruits, cauliflower, broccoli, nuts, etc., which are not available in Fiji, will continue to attract zero duty.

Professor Prasad says every day-use items like potatoes, garlic, onion, tea, and cooking oil will continue to attract zero duty.

Duty on lamb products, which was reduced to zero percent, will continue, while the reduced duty for beef, ducks, corned mutton, corned beef, and canned mackerel, which was reduced from 32 percent to 15 percent in the last budget, will also continue.

The government will maintain the five percent duty on dairy products like liquid milk, powdered milk, yogurt, cheese, and butter.

These products used to receive 32 percent protection under the previous Government, which had provided a 10-year exclusive tariff arrangement to one private company. Now, anyone can import these dairy products at five percent.

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