New Fis­cal Year Dates

Pos­i­tive re­sponse from top money ex­perts

Fiji Sun - - Front Page - Li­tia Cava

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

Aiyaz Sayed-Khaiyum

At­tor­ney-Gen­eral, Min­is­ter for Fi­nance

Photo: Paulini Rat­u­lailai

At­tor­ney-Gen­eral Aiyaz Sayed-Khaiyum at the press con­fer­ence yes­ter­day.

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