New Fiscal Year Dates
Positive response from top money experts
Attorney-General Aiyaz Sayed-Khaiyum yesterday announces the new dates for Government’s fiscal year. The Government fiscal year will now begin from August 1 and will end on July 31, beginning this year.
The Government fiscal year will now begin from August 1 and will end on July 31 beginning this year. The change was announced by the Attorney-General and Minister for Finance, Aiyaz Sayed-Khaiyum, at a press conference yesterday. Mr Sayed-Khaiyum said discussions would also be made with the Speaker to Parliament, Dr Jiko Luveni, for the November sitting to be brought forward to July so that the 2017 National Budget can be debated and implemented.
Previously, the Government fiscal year followed the calendar year, which starts from January 1 and ends on December 31. Mr Sayed-Khaiyum said discussions on this change started in December last year and also through meetings held with World Bank in January this year.
In the past, the end of the Government fiscal year coincided with the month in which many companies made their tax payment. Mr Sayed-Khaiyum gave the example of the Fiji Revenue and Customs Authority (FRCA) which recorded revenue of about $67million on December 31, 2015. “Now what that meant was that FRCA receives $67m on the 31st of December at 4 or 4.30pm, it does not get transferred to the Government books on that day itself so that $67million which is used as an example if it hits the government books after December 31st, it means that the revenue is received by government in 2016 not 2015,” he said. Mr Sayed-Khaiyum said it’s not good to have the financial year end the same time as when the tax payments were due. The new change will give time for the planning and implementation of the 2017 National Budget.
Another factor is the “holiday mode” rut many of the working population got into in the months of November and December. “Once the budget is approved and if your budget is approved at the end of November and you are supposed to start your financial year at the first of January, you only have one month to plan to get everybody together to say what exactly we will do and that is the holiday season,” he said.
“Your ability to get everybody’s focus and everybody’s presence is limited.” The third factor was Government taking an adaptation measure to avoid making predictions in the budget which is made before the cyclone season.
“This is a significant move, but nonetheless a very positive move, because it takes into account the situation on the ground, the administrative realities, and also issues pertaining to companies and revenue collections, and of course the issue pertaining to climate change,” he said.
COMMENTS: Visvanath Das – Acting Chief-Executive Officer, Fiji Revenue and Customs Authority
“With this, the corporate taxes, which is aligned to the 6 months and 12 months of the financial year, so with this the money coming into Government coffers is better aligned.”
Nouzab Fareed - President of the Fiji Institute of Accountants
“Normally a company or any other entity they change the financial year normally for positive reasons. In this case, the points highlighted by the Minister for Finance are all true but it is a surprise for me but it is no harm. “As long as the 12 months is followed and is the proper financial year, then I don’t see any issue. “Also because it is in the middle of the year, it will not disturb anybody – and that other the government entities like FNPF or FRCA, so for them because they work on calendar year, so many times they are not able to know the real result before it is time to go to the budget. So in this case they have enough time to plan. “So I think it’s a good thing and we as accountants we are not affected out of this.”
Jenny Seeto - Senior Partner, Pricewaterhouse Coopers
“The move to change the Government’s financial year to 31 July is good and pragmatic.
“It takes the pressure off during the traditional busy festive season.
“This will help administratively as well and the reasons given by the Attorney-General and Minister of Finance are valid reasons. “You will note that a number of companies in Fiji and globally do not have their financial year end at 31 December. “There are also other governments who do not have December as their year end. “From a consolidation perspective I wonder if this change will also apply to Government owned companies and statutory bodies who will also need to align their financial year end. This would make sense from an accounting perspective especially in terms of consolidation of financial results and presenting an overall perspective of the status of Government’s financial position.
“It would be easier for compilation and for all those involved in submitting their information to Government and for Government itself should accounting standards be applied for consolidation purposes.”
August 1 Government’s new fiscal year begins
July 31 Government’s new fiscal year ends Once the budget is approved and if your budget is approved at the end of November and you are supposed to start your financial year at the first of January, you only have one month to plan to get everybody together to say what exactly we will do and that is the holiday season
Attorney-General, Minister for Finance
Attorney-General Aiyaz Sayed-Khaiyum at the press conference yesterday.