Two hundred and eighty people in Fiji have taxable incomes of more than $270,000 per year and together they pay an estimated $28 million to Fiji Revenue and Customs Service, the recently released report of the Fiscal Review Committee stated.

This compares with 140,000 people having taxable incomes below the tax-free threshold of $30,000 and they pay no income tax.

The committee states 7000 people have taxable incomes between $50,000 to $270,000 and they pay an estimated $122 million in income tax and that 13,000 people have taxable incomes between $30,000 to $50,000 and pay an estimated $29 million in income tax.

“This is important information for people who believe that increases in indirect taxation (principally VAT) can be avoided by taxing those that are more well off,” states the committee.

“The reality is that there is a relatively smaller number of individual taxpayers who pay personal income tax and not enough well-off people in that group to tax for any significant revenue impact.”

“Around 21,000 individuals earn business income. These include sole traders, professionals who cannot incorporate as companies (for instance, accountants, doctors, lawyers) and some PAYE individuals with other income streams.

“While they are all required to file individual tax returns, fewer than 4000 of these 21,000 people actually pay income tax, because the majority return for business income of less than $30,000.

“Revenue collections from PIT (Personal Income Tax) has accordingly ranged between $165 and $210 million between 2018 and 2022.”

“This is about 2 per cent of GDP and about 8-9 per cent of total tax revenue – a relatively small proportion measured against countries similar to Fiji.

“This is mainly because Fiji’s current personal income tax threshold of F$30,000 – about 3 times per capita income – is higher in comparison with similar countries.

“The norm is closer to 1.5 of GDP per capita (which in Fiji would be about $15,000).”