New provision for specific tax offences
September 10, 2018
As consumers, we contemplate about the taxes levied on our groceries, bills, the service we use, salary etc. But what about the taxes you would not always find appended on to the end of your receipts or taxes that you did not know existed?
While spending, consumers need to be aware of the types of levies and taxes they are paying. Introduction of new taxes and changes to existing taxes are revealed annually during the National Budget Announcements.
As such, the 2018-2019 National Budget announcement on 28 June, 2018 was no different.
New Tax policies were announced and amendments to tax laws were also made. Most new taxes announced were effective the following day of the announcement, whilst others will come into effect from 01 August, 2018 or from 01 January, 2019.
New tax initiatives that were introduced included provisions to specifically deal with traders who cheated consumers when it came to levies and taxes. These new provisions on penalties are being introduced to deal with traders who unfairly charge Service Turnover Tax (STT), Environment Climate Adaptation Levy (ECAL) including the Plastic Bag Levy and Value Added Tax (VAT).
The Council welcomes such initiatives by the Government, which will undoubtedly benefit the Fijian consumers. Only last month the Council received a complaint where a trader charged a consumer $0.10 for ECAL and a further $0.05 for plastic bags.
The case was referred to the FRCS being the enforcement agency that issued the trader a slap on the wrist in the form of a warning.However, the Council strongly believes that numerous other consumers who did not read their receipts carefully could have been taken advantage of by the same trader.
The end sum of this particular trader could have been quite massive by taking an extra five cents from each consumer.The Council is hopeful that the new provisions will clearly set out the penalties traders will have to pay as a result of unfairly charging taxes and levies to consumers.
This will have the obvious effect of keeping unscrupulous traders on the straight and narrow while ensuring consumer rightsare protected. Such unfair market practices must stop immediately without compromising the interests of consumers.
The Council also anticipates that some shrewd merchants may try to again beat the system and defy the law by unfairly charging consumers with taxes and levies. Consumers are advised to be on the lookout for these traders and report against them.
Many complaints of a similar nature have been brought in the past.
From 01 August, 2017 to 30 June 2018 the Consumer Council has received 53 complaints regarding the levying of taxes and fees. These complaints include tax VAT, ECAL and STT.
The nature of complaints include traders charging $0.10 for plastic bags without the Point of Sale (POS) system, charging consumers $0.16 for plastic bags instead of 10 cents as required by law, charging for the sale of plastic bags but not reflecting it on the receipts, non – issuance of receipts, charging different prices for different sized plastics and charging the levy for plastics without handles, etc.
For VAT related complaints, one of the major issues faced by consumers was VAT Exclusive Price (VEP) of food displayed on receipts, nevertheless, consumers were asked to pay VAT Inclusive Price (VIP) when cashing out their bills.
Other cases include VAT charges not stated on the receipts, no tin number on the receipts and traders charging 15 percent VAT to consumers instead of 9 percent, etc.The new financial year, which begins on 01 August, 2018, will see the increase of plastic bags levy from $0.10 to $0.20.
This increase is to discourage the use of plastic bags and promote the use of reusable bags in line with government’s commitment towards environment initiatives. Government’s aim is to promote change in the behaviour of consumers.
There is a need to slowly move away from single use plastics and ultimately phasing them out in 2020.The Council advises consumers to be cautious when paying the new plastic bag levy.
They should remain vigilant and check their receipts after purchase and before leaving the supermarkets.
Please note that the Consumer Council of Fiji has now moved to Level 5, Vanua House, Victoria Parade, Suva.