Financial Crime World

Tax Evaders Under Fire: Fiji Revenue and Customs Service Cracks Down on Illegitimate Schemes

The Fiji Revenue and Customs Service (FRCS) has launched a crackdown on businesses and individuals who are evading taxes and customs duties through illegal means. This move comes as the government continues to offer incentives to promote growth and development, but some entities are taking advantage of the system by defrauding the government.

Common Techniques Used to Evade Taxes and Duties

Undervalued or Overvalued Invoicing

  • An importer pays for goods directly to the exporter but produces an inaccurate invoice for customs clearance.
  • This can result in lower import duties and taxes being paid, while also allowing funds to be shifted out of the country.

Double Invoicing

  • The exporter provides multiple sets of invoices for a single consignment, with the importer only producing one set for customs clearance.
  • This allows undeclared goods to be released from the border without detection.

Third-Party Invoicing

  • The original seller’s invoice is not produced to customs in the country of import, and a third party may be involved as a buying agent or related party.

Recent Landmark Case

A recent case involving an importer who was charged by the FRCS and paid several million dollars in taxes and duties with penalties highlighted trade-based money laundering. The modus operandi used included multiple techniques to evade import duties and exaggerate expenses for taxation purposes.

FRCS Investigations Lead to Recovery of Funds

  • Approximately FJ$16 million in duties and penalties has been recovered as a result of FRCS investigations.
  • Five cases were investigated during the 2016-2017 financial year, with domestic tax evasion and high probabilities of undervaluation, overvaluation, and profit shifting detected.

URGENT CALL TO ACTION

The FRCS is urging members of the public to report any customs or tax evasions or unprofessional conduct by emailing CEO@frcs.org.fj or contacting the Chief Executive Officer directly. Taxpayers can also lodge complaints with the Revenue and Customs Chief Executive Officer or the Chief Ethical Standards Officer.

Commitment to Fairness and Consistency

“The Fiji Revenue and Customs Service is committed to ensuring fairness and consistency in the application of tax and customs laws,” said a spokesperson. “We are working to create a level playing field for all taxpayers, and we encourage anyone with information about illegal activities to come forward.”