Tax evasion and tax planning by individuals and companies will not be tolerated by the Bainimarama Government.
And according to Fiji’s Prime Minister Commodore Voreqe Bainimarama, it was equally important for all taxpayers to adhere to the proper guidelines and pay their taxes on time.
“To improve compliance and policing of government revenue collections, the Fiji Revenue and Customs Authority will be equipped with an increased operating budget of $43.7m (US$23.6 million), an increase of $4.2m (US$2.2 million) over this year,” Commodore Bainimarama said at the announcement of the 2014 National Budget.
Despite government's efforts to reduce the cost of certain commodities through duty reductions, Commodore Bainimarama said the price of many of those items continued to escalate.
“To address this issue, the ministries of Finance and Industry and Trade, together with FRCA will form a taskforce in the next few weeks to undertake price monitoring and surveillance on key policy items that have been granted duty concession.
“Businesses that fail to pass on the concession to consumers will have their concession withdrawn.” Responding to FRCA grants in the 2014 National Budget, CEO Jitoko Tikolevu said they were comfortable with the additional $4.2m operating grant.
“The budget couldn't be better. Government is committed to ensuring there is consistency and a continuation of what was made available two years ago.
“The issue of us is always collection and where the money is coming from but we are comfortable with the additional grant, which will be for some of the reforms that we are doing internally.”
Tikolevu said this included reforms with information technology platform and equipment from abroad. He said a business would be as effective as the IT platform that supported it.
Meanwhile, Fiji government will remove the prohibition on credit card surcharges to allow retailers and merchants to pass on surcharges on credit card transactions.
And according to the Ministry of Finance, the policy change would lead to collection of additional revenues from value-added tax (VAT), sales turnover tax and other taxes.
Commodore Voreqe Bainimarama said this measure would lead to additional revenue of about $15million (US$8.1 million).
In terms of other tax incentives, Commodore Bainimarama said government would provide a blanket tax exemption on all investments in Unit Trusts, Fiji Holdings' mutual funds that were popular among small investors.
“The bold tax regime announced in the 2012 Budget and built upon last year will remain in effect in 2014 and beyond,” he said.
“The 2012 Budget took significant steps in liberalising our tax system by reducing personal income tax rates to a maximum of 20 per cent, benefiting 99 per cent of our individual taxpayers.
“It also reduced Customs duty rates and put in place attractive incentives for foreign investment.”
Commodore Bainimarama said the social responsibility tax rate, which was introduced in 2012, would be rectified and aligned to the 2013 incremental system.
This, he said, would ensure consistency and remove any anomalies. The incremental system would be backdated to January 1, 2012 and any applicable refund would be paid.