$2.1b black economy makes Government supervise business transactions
The Fiji Revenue and Customs Authority will soon have direct access to cash registers and point of sale systems in local businesses.
The Government funded the $5 million VAT Monitoring System, and supermarkets and pharmacies in Fiji have six months to implement the anti-tax evasion system.
The A-G said the system was implemented because of “the leakage by taxpayers within the system.”
“We have found that in many of the initiatives or incentives that Government has provided to reduce the final cost to the consumer regarding purchasing some of the basic day-to-day items, they were not being passed on to the consumers,”
Minister Sayed-Khaiyum said reductions in duty were “eaten up by one or two businesses along the supply chain.”
“If the system is such that it allows people to skewer it, then the benefits of what the government is doing will not be passed onto everyone else. It will not lead to economic growth and development.”
It is unclear how the new system would integrate with existing point of sale systems, and whether local businesses would be able to bypass the system.
The Attorney-General estimated that Fiji’s black economy was $2.1 billion dollars.
“In 2006, the World Bank had assessed that the black economy in Fiji at that point in time was worth about $716 million.”
Minister Sayed-Khaiyum said the revenue at that time was one-third compared to the current collection.
FRCA chief executive officer, Visvanath Das said the VMS would “push towards a cashless economy addressing the black economy challenges.”
Two years ago, the AG had announced in Parliament that a prominent supermarket in Fiji had not paid taxes for the previous six years.
“A major grocery outlet that is present in almost every town in Fiji has not paid any taxes for six years. Yet it is inconceivable that this company has made no profits.”
By not paying taxes, he said, the company’s management was denying services and opportunities to ordinary Fijians — the very people they needed to sustain their business.
The AG had added that a major accounting firm — in breach of its civic responsibility and the ethics of the accounting profession — had helped its clients make exaggerated claims of allowable expenses.
FRCA also launched two web portals; Information Update Portal and mySay.
The IUP is a web application to allow taxpayers to update their personal and business information. All taxpayers are required to register for IUP.
mySay enables customers to access FRCA services and track turnaround time in addressing queries.
Meanwhile, the AG also announced a pay raise for more than 800 FRCA employees.
Based on the 11 bands on the FRCA salary structure, the staff would receive a pay rise between 19% and 50%. Customs officers are at the top of the pay rise plans.