New Tax Information System is working well – FRCS

It has been revealed the Fiji Revenue and Customs Service has been receiving VAT returns from taxpayers for 0% and 9% VAT rates for April 2022 except for 15% VAT rate.

The FRCS says they are ensuring all the required technical software changes to their system related to the 15% VAT rate are fully implemented and tested first to ensure taxpayers do not face any adverse impact related to their first lodgement of 15% VAT later this month.

It says they have also communicated this broadly to all impacted businesses and ensured that no taxpayer is penalized by waiving all penalties.

FRCS has also clarified its New Tax Information System is working well with only two modules left to go live and the National Federation Party’s claim of catastrophic failure of the FRCS information technology including VAT revenue collection system is misleading and factually incorrect.

NFP Leader, Professor Biman Prasad says FRCS is unable to correctly process and input zero-rated or 0% VAT following removal of VAT on some basic and essential food items from 1st April following the revised 2021-22 Budget.

FRCS says this claim is inflammatory and misleading.

FRCS reiterates the lodgement of April 2022 VAT returns has been extended only for a month with no penalties.

It further says every VAT-registered business in Fiji is required under the law to keep a VAT account, which they use to file their VAT return and calculate their VAT liability to make VAT payments. Furthermore, FRCS says there is no revenue risk to FRCS, or taxpayers, as a result of the month’s delay in lodging VAT Return.

FRCS adds they made a conscious decision to expedite the budget outcomes to maximise the benefits of introducing the zero-rated items to Fijians in need and wanted those in need to benefit from the zero rated items as quickly as possible.

Meanwhile, Prasad says a public notice issued by the CEO of FRCS on 13th May advises registered taxpayers that lodgement of April 2022 VAT returns has been extended until further notice and that late lodgement penalty isn’t being applied.

He says the notice goes on to say that taxpayers making VAT payments can do based on their own calculations and any shortfall in the amount payable to FRCS will also not attract any penalty.

Prasad says this means FRCS’ system is dysfunctional and businesses will have to manually calculate their VAT collection and make payments at least for April and May.

The NFP Leader also says what this means is when the system is fixed and correct figures are calculated, there will be shortfalls in payment and this will heap financial burden on businesses, particularly small and medium traders who will be asked to pay the outstanding sum as soon as possible although FRCS says no penalty will be charged.

He adds the Government should have ensured FRCS rectified VAT revenue collection systems or at least had the capability of immediately adapting to swift changes well before the budgetary measures were announced.