Fiji Parliament Passes Tax Administration Amendment Bill to Clamp Down on Tax Evasion

The Fijian Parliament has enacted the Tax Administration (Amendment) (No. 2) Act 2017, aimed at strengthening laws against tax evasion and fraud. The amendment bill seeks to enhance the Fiji Revenue and Customs Service’s (FRCS) powers to issue administrative penalties and prosecute individuals or businesses that breach tax laws.

Enhanced Powers for FRCS

The new legislation amends Section 48 of the Tax Administration Act 2009, allowing the FRCS to issue penalties and institute prosecution against taxpayers who fail to comply with tax obligations. The amendment sets a threshold of $1.5 million in gross turnover for businesses to be eligible for both penalty and prosecution, excluding ordinary people or small businesses.

Rationale Behind the Move

According to an explanatory note accompanying the bill, the move is intended to deter future non-compliance and tax infringements, following the trend set by countries such as:

• New Zealand
• Australia
• South Africa

The FRCS will now have the discretion to issue penalties and institute prosecution against taxpayers who breach tax laws or fail to meet their obligations.

Key Provisions

Ministerial Powers

The Minister responsible for finance, Attorney-General Aiyaz Sayed-Khaiyum, has taken responsibility for the Act. The amendment bill also grants the Minister the power to:

• Amend the $1.5 million gross turnover threshold
• Prescribe groups of businesses eligible for penalty and prosecution

Impact on Tax Evasion and Fraud

The move is seen as a significant step towards curbing tax evasion and fraud in Fiji, which has been a growing concern in recent years. The FRCS will now have more robust powers to tackle tax cheats and ensure compliance with tax laws, ultimately benefiting the country’s economy.

Expected Implementation Date

The Act is expected to come into force on a date or dates appointed by the Minister.