Tax agency records $2.8b revenue
THE Fiji Revenue and Customs Service (FRCS) recorded a total revenue of $2.813 billion for the year 2018 to 2019.
This was revealed by the FRCS chief executive officer Visvanath Das during their submission to the Standing Committee on Public Accounts on the 2016-2017 Audit Report on Statutory Authorities in Suva yesterday.
This was a slight dip, according to him, as in 2017 to 2018 they had recorded a total revenue of $2.83b, while for the period 2016 to 2017 it totalled $2.57b.
“I think we also need to appreciate the fact that in recent times Fiji has become quite closely connected with the international arena and therefore, it is only prudent for us to be able to understand the fact that, of course, the global trends would have a more direct impact into our economy,” he said.
The global economic slowdown had impacted the Fijian economy, according to the CEO, as tax was a function of GDP and this impact would reflect that.
“I think in the 2018 to 2019, I should not rule out the fact that we still need to work in the black economy space.
“In any country, not only for Fiji, where there is a prevalence for cash transactions, black economy exists and it is a challenge to sort of make an effort to address that and I am pleased to say that at least in our context Fiji has already taken steps into the VAT monitoring system implementation.
“Of course, there are some challenges and there may be some resistance but, all in all, I would like to say that the slight dip I would attribute to global trends and a slowdown we experienced and, of course, we still need to work on the non-compliant areas.”
He said the business and political environment definitely had an impact on the business owners’ decisions.
“In the commercial perspective for commercial business decision and investment, there are factors and there are variables.
“Of course, you can say there is a tax regime which is very important for the business, of course, and this is not the only factor.
“Therefore, from a tax administration perspective it is a business owners’ decision into investment and profitability that will have a direct impact on the portion of revenue that FRCS can get.”
He also highlighted that by international benchmarks if a country had the tax-to-GDP ratio going beyond 25 per cent, this would result in heavy taxation of that country’s economy.
“However, in Fiji’s case we can see our average is at 23.3 per cent and that is a good indication that you know we are in the right space and at the right balance and economic growth as well as the tax revenue for the state.”
Mr Das said it took Fiji 85 years to reach the first billion dollar revenue mark and in the following 10 years it saw another billion dollar mark.
He said as we were going through the sixth year of the third phase, it was likely FRCS would be looking to reach a third billion dollar mark.