Parliament has passed amendments to the Income Tax Act to allow property owners affected by termite infestations to access disaster reserve funds in a tax-effective manner.
While speaking in Parliament yesterday, Minister for Finance Esrom Immanuel outlined the rationale behind the Income Tax (Amendment) Bill 2026, which seeks to expand the scope of the Natural Disaster Reserve under Section 28 of the Act.
Immanuel said the proposed amendment will allow declared biosecurity emergencies, including the Asian Subterranean Termite (AST) infestation, to be recognised under the reserve.
“The amendment aims to include declared biosecurity emergencies, specifically the AST or termite infestation, within the coverage of the reserve. This inclusion is necessary due to the extensive structural damage caused by the AST termite outbreak, particularly in the Western Division,” he said.
Currently, Section 28 allows businesses and homeowners to claim tax deductions when depositing funds into a reserve account to cover losses caused by disasters such as windstorms, tidal waves or landslides.
“For commercial, industrial or agricultural buildings, the deduction is kept at 1.5 percent of the replacement cost of the building. For residential buildings, the deduction is limited to the lesser of 1.5 percent of the replacement cost or $500,” Immanuel explained.
He noted that Fiji experienced a major outbreak of AST termites in Lautoka and Labasa in 2009 and 2010, and the infestation has continued to cause widespread structural damage to both residential and commercial buildings.
“Notably, insurance coverage is not available for termite-related damages,” he said.
Immanuel added that the Biosecurity Authority of Fiji classifies AST termites as one of the most destructive termite species globally and that the infestation remains a declared biosecurity emergency in Fiji.
However, he said the current law does not recognise such outbreaks as qualifying disasters under the Natural Disaster Reserve.
“As a result, affected property owners cannot access reserve funds in a tax-effective manner to support necessary repairs or reconstruction,” he said.
The proposed amendment would allow withdrawals from reserve funds for repairs caused by termite infestations to be treated the same as damages caused by cyclones, landslides or other natural disasters.
Immanuel said the change would support quicker recovery of hotels, tourism infrastructure and residential housing in affected areas while strengthening investor confidence and economic resilience.
