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Hotels Aid Act

LAWS OF FIJI

Revised Edition 1985]

CHAPTER 215

HOTELS AID

TABLE OF PROVISIONS

SECTION

1. Short title
2. Interpretation
3. Application to be made to Minister
4. Provisional approval
5. Grant of subsidy
6. Hotel owner may apply for investment
7. Special depreciation allowance
8. Investment allowance
9. Procedure on sale of hotel
10. Procedure in case of loss
11. Procedure when amount not written off at end of 15 years allowance as alternative

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Ordinance No. 35 of 1964, Legal Notice No. 112 of 1970,
Acts Nos. 35 of 1975, 17 of 1981

AN ACT TO PROVIDE FOR THE ENCOURAGEMENT OF HOTELS IN FIJI BY THE PROVISION OF FINANCIAL INDUCEMENTS

[23 December 1964]

Short title

1. This Act may be cited as the Hotels Aid Act.

Interpretation

2. In this Act, unless the context otherwise requires-

"extension" means the provision of additional accommodation or of additional amenities to an existing hotel;

"hotel" means any premises in which accommodation is supplied to or is available to be supplied to person in exchange for money or other valuable consideration;

"hotel owner" means any person who has been given a provisional approval under the provisions of section 4;

"project" means the building of a new hotel or the extension of an existing hotel;

"provisional approval" means the approval in principle by the Minister, signified in writing, to an application made under the provisions of section 3.

(Amended by Legal Notice 112 of 1970.)

Application to be made to Minister

3.-(1) In order to obtain the benefit of the provisions of this Act, any person wishing to carry out a project may apply to the Minister for provisional approval of the proposed project and, with his application, give the information with regard thereto as specified in subsection (2) and such other information as may be required by the Minister.
(Amended by Legal Notice 112 of 1970.)

(2) The information required to be given with an application under the provisions of subsection (1) shall be as follows:-

(a) the location and description of the site;

(b) the number and description of bedrooms and beds and of the toilet facilities, in the case of an existing hotel;

(c) the number and description of proposed new bedrooms and beds and the toilet facilities proposed to be established in connection therewith;

(d) a description of each public room both proposed and, in the case of an extension to an existing hotel, existing;

(e) a detailed description of any other amenities existing or proposed;

(f) a sketch plan showing in sufficient detail the site and lay-out of the proposed hotel or extension and the amenities thereof;

(g) an estimate of the cost of the project;

(h) where it is proposed to carry out the project in stages, a description, and an estimate of the cost, of each individual stage and details of the proposed timetable;

(i) details of the proposed method of financing the project.

(3) Without prejudice to his powers under section 4, the Minister may specify particular requirements applicable to any particular area of Fiji.
(Amended. by Legal Notice 112 of 1970.)

Provisional approval

4.-(1) The Minister, upon receiving an application under the provisions of section 3, shall consider such application and may, in his discretion-

(a) reject the application;

(b) give provisional approval to the application with or without such conditions as he may consider reasonable; or

(c) give provisional approval to a part, and reject the remainder, of the application and may impose such conditions to his partial provisional approval as he may consider reasonable.

(2) In arriving at his decision as aforesaid, the following matters shall be taken into consideration by the Minister:-

(a) the requirements for the accommodation of travellers in the area concerned;

(b) whether the proposed hotel or extension will make an adequate contribution to the requirements of the area concerned;

(c) whether the proposed accommodation is of suitable size and standard for the area;

(d) whether adequate amenities would be provided by the project.

(3) The decision of the Minister under the provisions of subsection (1) shall be final but, in case of rejection, shall not preclude any person from submitting a fresh application or amending his original application.
(Amended by Legal Notice 112 of 1970.)

Grant of subsidy

5.-(1) Subject to the other provisions of this section, where an hotel owner-

(a) has been granted provisional approval; and

(b) has completed the project and the amenities thereto have been provided in accordance with the provisional approval,

he shall be granted a subsidy up to a maximum rate of 7 per cent of the total capital expenditure incurred in the project and in the provision of such amenities as may be approved by the Minister in the provisional approval, but less the cost of any land acquired for the project.
(Amended by Legal Notice 112 of 1970; Act 17 of 1981, s. 2.)

(2) (a) Notwithstanding the provisions of subsection (1), the Minister; in his discretion, may authorise payment of the subsidy by instalments upon the production to him of progress payment certificates signed by an architect, registered under the provisions of the Architects Act, or such other suitably qualified person as may be approved by the Minister in that respect;

(Cap. 258.)

(b) where payment of the subsidy is made by instalments under the provisions of paragraph (a), the final payment shall not be made until such time as properly audited accounts have been produced to the satisfaction of the Minister, showing in adequate detail the amount of total capital expenditure incurred in the project.

(Amended by Legal Notice 112 of 1970.)

(3) Where payment of the subsidy is made by instalments under the provisions of paragraph (a) of subsection (2) and the project is not completed or is not completed to the satisfaction of the Minister, no further payments shall be made to the hotel owner:

Provided that the Minister may, in his discretion, make further payments where work on the project is resumed or where satisfactory completion subsequently takes place.
(Amended by Legal Notice 112 of 1970.)

^*(4) The provisions of this section, unless further extended by resolution of Parliament, shall expire on 31 December 1966:

Provided that, in respect of any application made by an hotel owner prior to 31 December 1966, any payments of subsidy unpaid at that date may be made in accordance with the provisions of this Act.
(Amended by Legal Notice 112 of 1970.)
* Extended to 31 December 1986 by Resolutions 9 December 1976 and 9 December 1981.

Hotel owner may apply for investment allowance as alternative

6. Where an hotel owner elects so to do he may, instead of accepting a subsidy under the provisions of section 5, upon satisfying the Minister of his eligibility to receive such a subsidy, avail himself of an investment allowance in accordance with the provisions of section 8:

Provided that, where an hotel owner has elected to avail himself of an investment allowance in accordance with the provisions of section 8 but no allowance has at that time actually been claimed under the provisions of that section, he may, subject to the approval of the Minister, revoke the election in. favour of the provisions of section 5 and any such revocation shall be final and binding on such hotel owner.
(Amended by Legal Notice 112 of 1970; Act 35 of 1975, s. 2.)

Special depreciation allowance

7. An hotel owner who has been granted a subsidy under the provisions of section 5 shall, in addition, be entitled, in each of the 15 years immediately succeeding the year in which capital expenditure has been incurred in the project, to claim a special depreciation allowance against the total income arising in respect of that income year for income tax purposes from that hotel or from any other hotel owned by the hotel owner of such amount of the total amount of capital expenditure as the hotel owner, in his discretion, so chooses, but so that no more than the total amount of capital expenditure shall be claimed as special depreciation allowance. For the purposes of this section, the total amount of capital expenditure incurred in the project shall include the provision of such amenities as may be approved by the Minister, but shall exclude the cost of any land acquired for such building or extension and the amount of any subsidy granted under the provisions of section 5. The special depreciation allowance for which provision is made in this section shall be an alternative and not in addition to any claim for depreciation in accordance with the provisions of the Income Tax Act.
(Cap. 201.)
(Amended by Legal Notice 112 of 1970.)

Investment allowance

8.-(1) Where an hotel owner has elected to avail himself of an investment allowance under the provisions of section 6 and not to claim a subsidy under the provisions of section 5, he shall be entitled to claim the following allowance:-

(a) an amount of chargeable income equal to 55 per cent of the total capital expenditure incurred in the project including the provision of such amenities as may be approved by the Minister, but less the cost of any land acquired for such project, shall be free of income tax;

(b) so much of such amount as shall be free of income tax in accordance with the provisions of paragraph (a) and which cannot be set off against the chargeable income for the first fiscal year of the hotel owner after the commencement of operation or after the completion of the extension shall be carried forward and be set off against the chargeable income of the next successive fiscal years of the hotel owner until such amount is wholly set off.

(Amended by Legal Notice 112 of 1970.)

(2) Notwithstanding the provisions of subsection (1), an hotel owner who has elected to avail himself of an investment allowance, may claim depreciation under the provisions of the Income Tax Act, and, for this purpose, the investment allowance shall not be taken into account.
(Cap. 201_.)

Procedure on sale of hotel

9. Where the property of an hotel has been sold and the capital expenditure in respect of such hotel has, in accordance with the provisions of section 7, been wholly or partly set off against income, the like consequences shall ensue as respects both the vendor and the purchaser with regard to the provisions of paragraph (a) of section 21 of the Income Tax Act as would have ensued if the transaction were the sale and purchase of depreciable property in the normal course of events.
(Cap. 201.)

Procedure in case of loss

10. Where any loss is incurred in connection with any hotel in respect of which a special depreciation allowance has been allowed under the provisions of section 7, such loss may be set off against the income of any other hotel owned by the hotel owner or may be carried forward and set off against the income of the hotel or any other hotel owned by the hotel owner for subsequent years, notwithstanding the period prescribed by section 22 of the Income Tax Act.
(Cap. 201.)

Procedure when amount not written off at end of 15 years

11. Where, at the expiration of the period of 15 years; any of the capital expenditure referred to in section. 7 has not been written off, depreciation allowance under the provisions of the Income Tax Act, may be claimed by the hotel owner, in the normal manner, upon the balance so remaining.
(Cap. 201.)

Controlled by Ministry of Economic Development, Planning and Tourism

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