Naidu maintains the law amendment to exempt people from paying the Capital Gains Tax for shares owned before May 2011 is strange, unusual and unfair

Prominent Suva lawyer, Richard Naidu maintains that the strange thing about the recently passed amendment to the income tax laws that deal with the exemption of people from paying the Capital Gains Tax for shares owned before May 2011, is that those who have not paid the tax after selling the shares will not have to pay and those that did follow the law and paid their tax on time will not be refunded.

Naidu says this new law seems unusual and is also clearly unfair to those that paid the Capital Gains Tax on time.

Capital Gains Tax is the tax you pay on profits from selling assets.

He says normally the Fiji Revenue and Customs Service would expect you to pay the taxes.

Minister for Economy, Aiyaz Sayed-Khaiyum had earlier said in parliament that Australia has done the same thing where they have exempted shares that were issued prior to the Capital Gains Tax coming into effect.

Naidu argues it is a different situation here in Fiji, and that Australia never said that people who owed the tax did not have to pay it.

Naidu says with the government taking away Capital Gains Tax on shares that people owned before May 2011 - that is if they sell them now - the government will also lose revenue.

He says it also seems strange that the government is letting go of the much needed revenue during these times when revenue collection is low.

Naidu also says for example if the government believes that it is not fair for people who owned shares in 2011 because 2011 is when this Capital Gains Tax came in, why isn’t the tax exemption extended to people who owned houses or land because those are also capital assets.

He believes it has not been explained why the shares is getting a special treatment.

Aiyaz Sayed-Khaiyum had stressed in parliament that the exemption of Capital Gains Tax is not for someone in particular after questions raised by the opposition.

NFP Leader, Professor Biman Prasad had said the government has suddenly chosen this time to give away more money to rich people by exempting them from the Capital Gains Tax.

Prasad adds they want to know who all will benefit from this change.

Under the amendment, if a person is required to pay Capital Gains Tax on the disposal of shares held by the person before 1st May 2011, and has not paid it, he or she is no longer required to pay this tax and any action or suit for the recovery of the unpaid capital gains tax immediately ceases.

If a person paid Capital Gains Tax before the commencement of this amendment, the payment of the tax is not refundable to the person.

We have sent questions to the Fiji Revenue and Customs Service on the amount of revenue that will be lost after the change in the law and the number of taxpayers that would benefit from the exemption.