Council Welcomes FRCA Initiative to clamp VAT Evasion

01/06/2017 14:56

The Consumer Council of Fiji welcomes the initiative undertaken by the Fiji Revenue and Customs Authority (FRCA) whereby they will be implementing the VAT Monitoring System (VMS) project in the supermarkets around the country soon.

For far too long some unscrupulous traders have been impinging on consumer pockets but not paying their dues to the government. Grocery stores and supermarkets tend to manipulate the systems by not specifying the products sold. Based on consumer complaints, the Council reported cases to FRCA where traders issued receipts where products were listed as ‘groceries’ rather than clearly stating whether the product was rice, powdered milk, cooking oil which were VAT exempted before 2016. Consumers were charged VAT for other items but shop owners declared it as VAT exempted items in their books.

Needless to say that the Council has also registered complaints relating to VAT over the years. For the period of January – May 2016 alone, 40 complaints pertaining to VAT were received where some traders failed to adjust VAT reduction from 15% to 9%. Again, these cases were referred to FRCA. 

Hence, the new initiative which will see the VMS software linked to the supermarkets cash registers, will provide real time data to FRCA on total company sales and the amount of VAT collected.

The Council sees this as a right approach to contain VAT evasion so that this tax can be spent on public goods. Currently such tax do not reach the Government coffers due to the deceitful acts of some traders.