The Fiji government has introduced legislation in parliament to exempt foreign diplomatic missions from having to pay the 12½% Value Added Tax in the construction of their embassies.
The exemption will apply to the building of all diplomatic missions, but in this instance it is aimed specifically for the benefit of the United States which will build a new 36-million US dollar embassy about 4km from the city centre in Suva.
The finance minister, Ratu Jone Kubuabola, has told parliament that approval of the legislation will mean that the US government will be able to claim a refund of about 5-million US dollars in Value Added Tax.
Value Added Tax is the Fiji government's biggest source of revenue and is normally paid on all building materials and services used in construction in Fiji as well as on all other goods and services..
The new United States embassy building will feature all modern security features designed to protect it from terrorist threats.