THE employer monthly summary (EMS) is an electronic report which is lodged through email by employers to Fiji Revenue and Customs Authority on a monthly basis. It contains the amount of pay-as-you-earn (PAYE) tax deducted from each employee during that particular month. This replaces the annual summary that was previously done by employers prior to 2012. Today FRCA chief executive officer Visvanath Das talks more about PAYE EMS Lodgements.
FT: Are salary and wage earners required to lodge a tax return for 2016?
CEO: No, they are not required to lodge a tax return for 2016 unless if they fall under any of the following scenarios:
* if the employee had two or more employments during the year and the total income received is above $16,000;
* where an employee receives a demand notice from the commissioner to lodge a return;
* the employee also has other sources of income e.g. rent, dairy, commissions etc. (but does not include pension income). The employee will have to complete and lodge a Form B Return; or
* employees who are earning above $270,000 and are subject to Social Responsibility Tax
* where an employee is entitled to a refund due to:
i. receiving redundancy or lump sum payments; or
ii. employed for part of the year.
iii. seeking clearance for migration.
FT: Why are they not required to lodge a 2016 tax return?
CEO: Previously employees were required to file a tax return for the purpose of an assessment that will determine whether there is a refund or payable assessment.
From 2013 onwards PAYE became a final tax and this would mean that most employees would not be required to lodge a tax return since its self-assessment.
The introduction of final tax on PAYE and its alignment to self-assessment means that the employee’s duty to lodge a tax return is replaced by lodgments of monthly EMSs made by the employer.
FT: You mentioned the introduction of final tax on PAYE, what does final tax mean?
CEO: Final tax means that on every pay (1st pay till the final pay) an employee earns in 2016, his/her employer would have deducted the correct amount of tax the employee was liable for on that pay — no more no less.
Every month an employer is required to lodge an Employer Monthly Summary and remit all PAYE deducted in the previous month.
At the end of the year employer should issue a certificate to the employee detailing the total income earned for the year and the tax deducted.
With the certificate the employee would be assured that his/her PAYE is correctly paid and no more tax refund or further tax to be paid to FRCA.
However, employees are welcome to enquire with FRCA on any issue on PAYE.
FT: Are employees affected if the employer monthly summary (EMS) is not lodged to FRCA?
CEO: Yes, without the 12 months EMS details from employers, FRCA will not be able to confirm to employees their tax position for the year. This is applicable to both employees whose salary salaries are above and below the annual tax threshold of $F16,000.
FT: What happens to employers that do not lodge their EMS?
CEO: Firstly they will be fined for non-lodgment and secondly any wages claimed as an expense in the Profit and Loss Statement by the business may be disallowed.
Issuing of Tax Compliance Certificate and tax clearance can became an issue.
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