High Court upholds VAT Amendment
The High Court of Fiji has dismissed an application for constitutional redress filed by the Data Bureau against the Fiji Revenue and Customs Authority and the Minister for Economy challenging the constitutionality of Section 72(A) of the Value Added Tax Decree (“Decree”), amended in 2015. The proceeding was specific to the VAT reduction from 15 to nine per cent announced by the Minister for Economy in the 2016 National Budget.
Section 72(A) states that if the percentage of VAT decreases, a registered person must sell goods and services at a price which reflects the actual percentage of any VAT decrease. Failure to comply will result in a fine not exceeding $50,000 which must be paid within 21 days of the notification. The Data Bureau was found to have charged 32 customers for credit checks from the period of 1-16 January at rates that did not incorporate the VAT reduction from 15 to nine per cent as announced in the 2016 National Budget. For this breach, the Data Bureau was fined $25,000 on January 22. After failure to pay the fine within 21 days, the Data Bureau incurred an additional penalty of $100,000, as stipulated by the Decree. The High Court ruled that Section 72(A) was not unconstitutional.
“This is a major victory for Fijian consumers, as it affirms the Government’s ability to penalise those businesses who fail to pass on the savings of any reduction to the VAT or on customs duties. “Consumers are now better protected from businesses seeking to withhold potential savings, and that increases the purchasing power of the ordinary Fijians who need it most,” said the Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum.