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Agriculture Incentives

Agriculture Incentives
Fiji Revenue and Customs Service chief executive officer Visvanath Das
May 26
11:02 2018

Government has confidence in the ag­riculture sector and has laid a long term plan where we will have large commercial farms, taking Fiji into a new agriculture era.

The tax incentive is part of Government’s modernisation of the agriculture sector aimed to make it more productive for the nation’s needs and ensuring that we become self-sufficient.

These tax incentives will assist commer­cial and agro farming owners to introduce new agricultural methods, new technology, new crops, and improve animal husbandry.

The incentives comprise of commercial ag­riculture and agro-processing,small Micro Enterprises (SME’s) and bio-fuel Produc­tion.

Apart from being tax free, most items for agricultural purposes are duty free on im­portation and some are granted duty free concessions on application.

There are various types of tax incentives currently available for businesses engaging in the agricultural sector.

It comprises of commercial agriculture and Agro-Processing, small micro enter­prises (SME’s) and bio-fuel Production In­centives.

Apart from being tax free, all items for ag­ricultural purposes are granted duty free concessions.

These includes specialised machinery, equipment and agricultural inputs and are considered for duty free concessions upon a support letter from the Ministry of Agricul­ture.

However, the respective tax incentive is subject to specific conditions.

For Commercial Agriculture and Agro- Processing Tax Incentive the income of the taxpayer shall be exempt only if the activity is a new activity approved by Revenue and Customs and established from January 1, 2015 to December 31, 2018.

The investment threshold and income tax hol­iday is as follows

(1)Commercial Agriculture and Agro-Pro­cessing Tax Incentive- The income of the taxpayer shall be exempt only if the activity is a new activity approved by Revenue and Customs and established from January 1, 2015 to December 1, 2028.

The investment threshold and income tax holiday is as follows:

(2)For SME’s, the income shall be exempt from tax only if the annual gross turnover or sales not exceeding $500,000 and include activities of the following sectors only:

  • Agriculture and fishing (agriculture will cover activities in the entire agriculture sec­tor)
  • Tourism (sea cruise and river tour opera­tors)
  • Community and Social Services (Amusement,recreation services; tradition­al handicraft producers (not “middleman” or agents).
  • Supportive projects to tourism industry (flora, fauna and other natural characteris­tics of Fiji; and history, traditions, cultures and ways of life of its peoples)

(3)For bio–fuel production – the income of the taxpayer shall be exempt for a period of 10 consecutive fiscal/tax years only if the applicant engages in a new activity in pro­cessing agricultural commodities into bio-fuels and is approved by Revenue and Cus­toms and established from January 1 2009 to December 31, 2028.

To qualify, the taxpayer must have a mini­mum capital investment of $1,000,000 and employ 20 or more local employees in each of the 10 years.

Duty free on importation of agricultural items

There are duty exemptions available on the importation of plant, machinery and equip­ment for initial establishment of the factory, chemical required for bio-fuel production and all agricultural items.

However, per cent import VAT will still apply on importation of these items which would be refunded to those that register for VAT purpose.

For commercial agriculture and agro-Pro­cessing and bio–fuel production incentives, the investor will have to make an applica­tion to Revenue and Customs to qualify for the incentive.

For the SME incentive, the investor can claim for the exemption in the income tax return for a fiscal/tax year.

Duty concession on the importation of capi­tals for Agriculture purposes

There are duty exemptions available on the importation of plant, machinery and equip­ment for initial establishment of the factory, chemical required for bio-fuel production and all agricultural items.

However, nine per cent import VAT will still apply on importation of these items which would be refunded to those that reg­ister for VAT purpose.

How to apply for these agricultural tax incen­tives?

For Commercial Agriculture and Agro- Processing and Bio – Fuel Production in­centives, the investor will have to make an application to the Revenue and Customs to qualify for the incentive.

The application should include a compre­hensive background of the project such as the director and shareholder details, state­ment of assets and liabilities, location and description of the site of the project, details of the business activities, sketch plan of the project, costing and financing details, com­pletion dates, employment details, etc.

For the SME incentive, the investor can claim for the exemption in the income tax return for a fiscal/tax year.

Incentives on stamp duty for small and micro enterprises (SME’s)

Small and micro enterprises under stamp duties act includes any business with an an­nual gross turnover or sales not exceeding $500,000 therefore all those engaging in agri­cultural activities can qualify for this stamp duty waiver.

However, they must be a registered busi­ness with a business license, be tax and customs compliant and will be required to provide a statutory declaration confirming that they have a gross turnover not exceed­ing $500,000.

Copies of financial statements must be at­tached where applicable.

The policy intention for this incentive is to assist the SME’s.

Post assessment audits will be conducted to verify declarations.

Severe penalties will be imposed where tax­payers make false declarations or scheme to evade this tax.

Fiji Revenue and Customs Service chief executive officer Visvanath Das.

If there are any taxation issues you would like us to interview Fiji Revenue and Customs Authority about, please do send in your email to: maraia.vula@fijisun.com.fj

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