WORLD TRADE  
ORGANIZATION  G/SCM/N/211/FJI 
30 July 2010 
 (10-4102) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for  
the Elimination of Export Subsidies Pursuant to the Procedures Contained  
in the General Council Decision in Document WT/L/691  
 
FIJI 
 
 
 The following notification, dated 30 July 2010, is being circulated at the request of the 
Delegation of Fiji.    
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 In accordance with paragraph 10.6 of the Decision on Implementation-Related Issues and 
Concerns (WT/MIN(01)/17) and with refere nce to document G/SCM/39 adopted by the 
Fourth Ministerial Conference, held from 9 to 14 November 2001 in Doha, Qatar, and further to our 
notification dated 26 June 2009, the Government of the Republic of the Fiji Islands wishes to submit 
hereunder updated informa tion about the programmes for which extensions are being sought under 
Article 27.4 of the Agreement on Subs idies and Countervailing Measures.   
  Please note that the Action Plan required under Paragraph 1(f) of the decision contained in WT/L/691 is incorporated into this notificati on under the heading of each of the programmes. 
 
Export Income Deduction
 
  The objective is to provide a facilitating mechan ism available to local producers of exportable 
commodities for imported inputs (not locally produced).   For the past few years, Fiji's Balance of 
Payments and Foreign Reserves have been under signi ficant strain due to an underperforming export 
sector and a burgeoning import bill - in large becau se of high petroleum and food prices and the 
recent devaluation of the Fiji currency.  The export income deduction is a measure therefore, to help 
stabilize Fiji's weak Balance of Payment and Fo reign Reserves position which has been exacerbated 
by the global economic crisis.  With the conseque nt slowdown in global demand, it is critical that 
adequate support is given to our domestic producers to maintain expor ts of goods in which we have a 
comparative advantage.  In compliance with l(f) of  WT/L/691, a schedule for the elimination of the 
Export Income Deduction Scheme is given below.   
  From 2009-2010, 50 per cent of e xport profit will be taxed, and in  2011, all export profits will 
be fully taxed.    
Year of assessment Percentage of export income to be deducted 
2001 and 2002 100% 
2003 and 2004 75% G/SCM/N/211/FJI 
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  Year of assessment Percentage of export income to be deducted 
2005 and 2006 50% 
2007 and 2008 50% 
2009 and 2010 50% 
2011 50% 
2012 40% 
2013 30% 
2014 20% 
2015 0% 
 
Action Plan :  This programme, notified in 2010 as being due to terminate in 2011, has been extended 
as per the above table due to increased pressures brought on by the global economic crisis and the 
subsequent need to support continued investment in Fiji.  Nonetheless, the decision of WT/L/691 
being born in mind, the period has not been extende d beyond the expiry of the extension period.  No 
legislative changes will be required to effect th e termination of this programme.  Administrative 
arrangements are in the process of being made , in conjunction with the public announcement 
necessary for all beneficiaries.   
 
Export Processing Factories/Ex port Processing Zones Schemes  
  The Government of Fiji had given a clear indica tion of its intentions with regard to the Tax 
free Factories/Tax Free Zones Scheme in the 2001 B udget.  Essentially, no further approvals have 
been/will he given after 31 December 2000 to companies applying to operate under the Scheme, 
which grants a company exporting 70 per cent or mo re of its products Fiscal duty, Value-Added tax 
and Income tax exemptions for a period of 13 year s.  However, given that some companies were 
given approvals prior to 31 December 2000, the Sc heme is most likely to cease on 2015 or earlier.   
  As the initial legislation provided that licenses would only be issued until 2001 for a 13 year period, no further legislative or administrative amendm ents will be required for the termination of this 
programme by the end date of the extens ion provided for Art 27.4 subsidies.   
 
 There has been no change to this sch eme since Fiji's last notification.   
 Action plan
:  This programme does not need an action pl an to be prepared as it will automatically 
terminate before the extension period expires.  Th is is a result of the programme being of finite 
duration with licences being granted for a period of 13 years only until 2001.  As such, the last 
licenses are expected to expire in 2014 and the pr ogramme will automatically terminate in 2014.  No 
legislative or administrative changes will thus be required to effect the termination of this programme.  
Beneficiaries have been aware of the limited time duration of this programme from the time of the 
programme having initially been publicly announced.  
Film Making and Audio-Visual Incentives (Sixth Schedule)
 
 
Income TNC Deduction 
 150 per cent deduction for capital expenditure on an F1 audio visual production.   
 125 per cent deduction for capital expenditure on an F2 audio visual production.   
 Income TRY Exemptions 
 Net income from an F1 production is exem pted until taxpayer has received a 60 per cent 
return on capital expended.  Thereafter, net income  will be fully taxed at the marginal rate.   
  Net income from an F2 production is exem pted until taxpayer has received a 50 per cent 
return on capital expended.  Thereafter, net income  will be fully taxed at the marginal rate.    G/SCM/N/211/FJI 
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Brief description of F1 and F2  
  An F1 production must be made wholly or su bstantially in Fiji and contain significant local 
content.   
 
 An F2 audio visual production can be obtained if the production entity has secured 
distribution for the production in at least 2 si gnificant international markets and a guaranteed 
minimum return on investment is achieved, etc.    Studio City Zone Concessions 
 
 A licensed audio-visual producer is exempt from the payment of income tax (except for 
withholding tax) on any income derived from th e production activity carried on in the zone.  
 
 An approved individual who derives income from work in audio-visual production including 
fees, wages, royalties, profits, etc;  and any in come earned from sports performances including prize 
money, performance fees and endorsements is exempt from tax.     Live broadcast of films made or filming carried out in Fiji is zero-rated for VAT purposes.    Film TRY Rebates 
 
 A 35 per cent rebate or credit on production cost s spent in Fiji is available to audio-visual 
producers.  The maximum allowance the government grants is $8.75m.    
Action Plan
:  As has been included in past notificati ons, this programme was notified initially under 
Article 27.4 of the ASCM in error as it refers to a programme relating to trade in services which falls 
outside the scope of the ASCM.  It has nonetheless c ontinuted to be notified for purposes of juridical 
certainty.  As it does not actually fall under the scope of the ASCM, has no plans to terminate the 
programme and has not prepared an action plan.    
 
 
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