From Aug 1: Lower Vat, Higher Pay and Discounted Bus Fares
The VAT rate will be lowered from 15 per cent to 12.5 percent, delivering $250 million in tax relief to consumers.
Wednesday 30 July 2025 | 22:00
New bus fares will come into effect from August 1, 2025. Photo: Ronald Kumar
Fijians can expect a wave of economic relief beginning tomorrow as key Government Budget measures take effect.
These include a reduction in Value Added Tax (VAT), a pay rise for civil servants, and a nationwide bus fare subsidy.
VAT Reduction
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The VAT rate will be lowered from 15 per cent to 12.5 percent, delivering $250 million in tax relief to consumers.
This follows the continuation of the zero-rated VAT policy on 22 essential items, which already accounts for $250 million in relief.
Combined, these measures total $500 million in VAT relief aimed at reducing the financial burden on households.
Pay boost for civil servants
All Government employees will receive an additional 3 percent salary increase starting in August.
This comes on top of last year's salary adjustments, which ranged from 7 to 20 per cent.
The Ministry of Finance estimates that these pay increases represent a total cash injection of $115 million into household incomes - $85 million from last year and $30 million in the new budget.
"This means that civil servants will have received between 10 and 23 per cent in total salary increases within the span of a year," the Finance Ministry stated.
Bus fare subsidy
Starting tomorrow, all Fiji citizens will benefit from a 10 per cent reduction in bus fares, a subsidy that will run for 12 months until July 2026.
The programme will cost the government approximately $10 million.
While the subsidy will ease transport costs for commuters, no further details have been provided on how the scheme will be implemented with bus operators.
What this means
For Seruwaia Biu, 71, from Vadravadra, Gau, the 10 per cent bus fare reduction will make her trips more manageable, and she won't have to rely on family for transportation costs.
"It may be just 10 per cent, but for us pensioners, that saving means something. I'm grateful the Government is thinking of us," she said.
Simione Samu, 78, from Yakete in Ba, shared a similar sentiment.
"Life is hard in the village. This is a small light in our darkness. Every little bit helps," he said.
The subsidy will remain in place until July 31, 2026.
For many, the move represents more than just cheaper travel.
It's a step toward economic relief at a time when it's needed most.
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