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 way, Finance Minister Esrom Immanuel announced after presenting the Income Tax (Amendment) Bill 2026. The change expands the scope of Section 28 of the Act to recognise declared biosecurity emergencies — specifically the Asian Subterranean Termite (AST) infestation — as qualifying events for the Natural Disaster Reserve.
Immanuel told MPs the amendment is necessary because the AST outbreak has caused extensive structural damage across the country, with particularly severe impacts reported in the Western Division. “The amendment aims to include declared biosecurity emergencies, specifically the AST or termite infestation, within the coverage of the reserve,” he said, noting that affected buildings range from private homes to commercial and tourism infrastructure. He added that insurance for termite-related damage is not available, leaving many property owners without options for recovery funding.
Under current law, businesses and homeowners may claim tax deductions when depositing funds into a disaster reserve account to cover losses from events such as windstorms, tidal waves or landslides. For commercial, industrial and agricultural buildings the deduction is 1.5 percent of the replacement cost of the building; for residential properties it is the lesser of 1.5 percent of replacement cost or $500. The amendment keeps that framework but extends eligibility so withdrawals to repair termite damage are treated the same as withdrawals for other recognised natural disasters.
Immanuel said the Biosecurity Authority of Fiji (BAF) classifies AST as one of the world’s most destructive termite species and that the infestation remains a declared biosecurity emergency in Fiji. He pointed to historical outbreaks in Lautoka and Labasa in 2009 and 2010 and warned that the ongoing spread has continued to inflict widespread structural harm to homes, hotels and other buildings. The fiscal change is intended to speed repairs and reconstruction by allowing owners to use reserve accounts without the previous tax disadvantages.
The government frames the amendment as a measure to protect livelihoods and the tourism sector, particularly in affected towns where hotel stock and tourism-supporting facilities have shown damage. “The change would support quicker recovery of hotels, tourism infrastructure and residential housing in affected areas while strengthening investor confidence and economic resilience,” Immanuel said, outlining the expected economic benefits of reducing recovery time and uncertainty for investors and property owners.
The move follows a series of targeted relief efforts by the government for sectors hit by natural and man-made disasters, including support packages for sugar farmers and housing initiatives. With insurance unavailable for termite damage, the Natural Disaster Reserve amendment is likely to become the principal public mechanism for financing repairs stemming from biosecurity events. Details on how property owners will apply for recognition of termite damage and access funds under the amended rules are expected to be set out in regulations and guidance from the Finance Ministry and relevant agencies in the coming weeks.
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