Court Ruling on VAT - Victory for Consumers

01/09/2016 12:52

The recent landmark Ruling by the High Court of Fiji over the non-compliance of VAT reduction by Data Bureau sets a precedent and acts as a ‘warning’ to traders and service providers that continue to profiteer by charging incorrect VAT rate to consumers.

The Ruling is indeed a victory for Fijian consumers considering that unscrupulous traders /service providers have been failing to pass on VAT or duty reductions to the consumers when announced by the Government during National Budgets as an effort to address high cost of living. Any reduction in VAT or duty must translate into savings for consumers.

The Data Bureau was found to have charged 32 customers for credit checks from the period of 1-16 January at rates that did not incorporate VAT reduction from 15 to 9 per cent as announced in the 2016 National Budget. For this breach, the Data Bureau was fined $25,000 on 22 January 2016. After failure to pay the fine within 21 days, the Data Bureau incurred an additional penalty of $100,000, as stipulated by the Decree.

Section 72(A) of the Value Added Tax Decree states that if the percentage of VAT decreases, a registered person must sell goods and services at a price which reflects the actual percentage of any VAT decrease. Failure to comply will result in a fine not exceeding $50,000 which must be paid within 21 days of the notification. If a person fails to pay the fine and on conviction will be liable to pay a fine not exceeding $100,000 or to a term of imprisonment not exceeding 10 years.

The Council has been working closely with Fiji Revenue & Customs Authority and Fiji Commerce Commission in exposing such notorious businesses that fail to apply 9 per cent VAT rate or pass on the duty reductions announced by the Government on the specific goods and services. From 1 January 2016 to date, the Council handled 148 VAT related issues and referred 31 VAT-related complaints to FRCA.