Revenue from VAT takes a nosedive

VALUE added tax (VAT), Government’s largest source of revenue, declined by $374.2 million as at September 2020, says the Reserve Bank of Fiji.

This, compared with about $620 million VAT collections by Fiji Revenue and Customs Service for the same period last year.

In its third quarterly review for the year released on Friday, RBF said VAT collections were down 41 per cent as at September.

In 2017-2018, total VAT collections stood at $751.3 million while $805.5 million was collected in 2018-2019.

The Ministry of Economy said in its economic and fiscal supplement for the 2019-2020 budget that VAT collections forecast for the 2019-2020 financial year was $855.5 million.

The RBF said VAT collections on imports declined by 31 per cent as at September while domestic VAT collections declined by 24.6 per cent.

VAT collections from government departments have recorded an 11.4 per cent decline by September and FRCS recorded a decline of 6.8 per cent in “pay as you earn” tax collections as at September.

VAT is a tax levied on the supply of goods and services in Fiji at the rate of 9 per cent.

This came into effect from January 1, 2016.