Exactly 2 years after raising VAT, government cuts VAT 2.5% to 12.5%
Fiji’s coalition government on 27 June announced it is cutting VAT from 15% to 12.5% from 1 August 2025. This is a reversal of the August 2023 increase. There will be no change to the list of zero-rated supplies.
The VAT cut is contained within the 2025-26 National Budget, and estimates the cut will save $500 million for the population.
Aug 2023: return of standard VAT rate to 15% for all supplies
Fiji’s 2023-24 budget, 30 June 2023, included a rise in the standard VAT rate from 9% to 15% from 1 August 2023. Previously, 9% was the main standard rate – although a range of supplies are already charged at 15%. The 9% rate has now been withdrawn.
Fiji had cut VAT to 9% on most supplies in 2016. It is one of the lowest in the region. New Zealand GST it 15% and Australia’s is 10%.
Zero-rated VAT will continue for the following supplies: zero VAT will include, flour, rice, sugar, canned fish, cooking oil, potato, onion, garlic, baby milk, powdered milk, liquid milk, dhal, tea, salt, soap, soap powder, toilet paper, sanitary pads, toothpaste, kerosene, cooking and prescribed medicines.
Fiji digital services have been subject to VAT since 2020.
This change in VAT rates will generate additional VAT collection estimated at $446 million for government.
