A crackdown on Fiji’s underground economy has begun, with a tax crime task force set up within the national tax office to begin a probe into this largely unknown, unvalued and untaxed economic activity.
The Tax Compliance Task Force was officially announced yesterday by Deputy Prime Minister and Minister of Finance Prof Biman Prasad, who assured taxpayers it “wasn’t about going on a witch hunt” but about “paying the appropriate tax.”
“We recognise that a majority of the businesses, majority of Fijians are doing the right thing, they’re paying their fair share of taxes,” he said.
“And we need to adopt strategies to deal with those tax payers, and I would say maybe a few, who are evading taxes. Deliberate tax evasion is detrimental to Fiji’s economy.”
The extent of dirty money in Fiji’s financial system is still unknown and the work of the task force is expected to put a value on that.
“That number is still unknown as you know we have a shadow economy and effectively we haven’t come to terms with it, so basically we’re still trying to understand what are the transgressions from the taxpayers out there, what kind of money is not being paid to taxes, so this task force will actually set up a framework for us to actually look at how we’re going to address the situation,” FRCS chief executive officer Udit Singh told this newspaper, adding that the framework should be in place in the next two months.
“We’re working with overseas agencies like the Australian Tax Office and a number of overseas development partners to actually develop the framework.
“It’s around tax compliance. It’s around the shadow economy. It’s around unexplained wealth and it’s also around undisclosed wealth.”
Taskforce chair and seasoned chartered accountant Nitin Gandhi said it was imperative to recognise the dynamic landscape of the tax administration in Fiji which he said is characterized by the increasing presence of the multinational enterprises (MNEs) and the evolving challenges of domestic tax avoidance and evasion.
“Tax avoidance and evasion poses a significant threat to the integrity of our tax system and the overall economic stability of our nation,” he said.
