An Introduction to Environmental Climate and Adaptation Levy (ECAL)

The Environment & Climate Adaptation Levy (ECAL) is a new tax introduced in alignment to Fiji’s recognition of the importance of safeguarding the environment and the impact the economy has had on Climate Change. It is charged at the rate of 5% on the gross annual turnover of a prescribed service. ECAL is computed by applying the rate to the prescribed service amount. The ECAL is administered by FRCS however it will be collected by the prescribed service provider. Registration for ECAL is dependent on the taxable threshold.

ECAL is computed by applying the rate to the prescribed service amount. The ECAL is administered by FRCS however it will be collected by the prescribed service provider. Registration for ECAL is dependent on the taxable threshold.

ECAL is a new tax introduced in alignment to Fijis recognition of the importance of safeguarding the environment and the impact the economy has had on Climate change. It is charged at the rate of 5% on the gross annual turnover of a prescribed service.

ECAL is computed by applying the rate to the prescribed service amount. The ECAL is administered by FRCS however it will be collected by the prescribed service provider.

All prescribed service providers whose annual gross turnover in respect of the provision of a service listed under Schedule 1 of the Act exceeds $ 3million must register for ECAL in FRCS effective 1 August 2018.

Services that fall under ECAL are:

Service Providers Services subject to ECAL
Licensed hotels Accommodation, refreshments and any other services.
Tourist vessels operating within Fiji waters Accommodation, refreshments and any other services provided on board.
Licensed bars Meals, beverages and any other services provided in a licensed bar. This includes licensed bars located, for example, in private clubs.
Licensed Nightclub Services such as music, dancing or other entertainment including other services
Inbound tour operators Travel, tour and sight-seeing services.
Organizers of entertainment programs /product exhibitions Entry fees to the events venue.
Recreational Activity operators Recreational activities provided by these operators E.g. Skydiving
Cinema Operators Entry fees and all services provided within the cinema premises.
Licensed Rental/hire car operators Applicable from 01/01/15 for any hire of chauffeur driven motor vehicles. This applies to motor vehicles that come with a driver, does not have a meter/the fare is negotiated or is fixed. It also includes vehicles with ‘LH’ license plates and the hire of rental cars and other transport services by a rental car operator. However, it does not include the hire of taxis.
Bistros and coffee shops Meals, beverages and other services.
Licensed Restaurants Meals, beverages and other services.
Aircraft operators This applies to charter flight services except for charter flights for medical or natural disaster relief evacuations services are not subject to STT and ECAL.
Water sports operators All water sports activities including river safaris.
Home stay operators Accommodation and other services provided in a private residence or property that accommodates tourists, international students or overseas visitors who are paying guests. It does not apply to hostels/accommodation operated by public educational institutions.

 

Service providers who now have an annual gross turnover less than $ 3million shall no longer be considered as prescribed service providers and are not mandated to impose ECAL as long as they are under the said threshold.

Revised threshold of $3 million came into effect 1st August 2020

For new businesses, the owner or person who is responsible for the daily management of a prescribed service (Accountable Person) should register with FRCS once they become liable or legally responsible to register. The Accountable Person should first obtain a Taxpayer Identification Number (TIN), and then register for ECAL purposes. Registration must be done within 30 days before the business commences.

ECAL registration depends upon the ECAL taxable threshold. A service provider will be required to register for ECAL where the annual gross turnover for the provision of such service has exceeded $ 3million.

Once the above persons reach the taxable threshold, they should register at FRCS so that they can start including ECAL in their service charges. The effective date to start accounting for ECAL is the month of registration

ECAL component of SRT

Taxed on individual’s income. ECAL threshold (as of September 2020) is FJD$270,000 

Chargeable Income ECAL Levy
270,001 – 300,000 5% of Excess over $270,000
300,001 – 350,000 5% of Excess over $300,000
350,001 – 400,000 5% of Excess over $350,000
400,001 – 450,000 5% of Excess over $400,000
450,001 – 500,000 5% of Excess over $450,000
500,001 – 1,000,000 5% of Excess over $500,000
1,000,000+ 5% of Excess over $1,000,000

Drop us an email or give us a phone call now if you would like us to guide you further regarding the implications of ECAL on you and your business.

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