SUNBIZ

Black Economy Labelled A Challenge

  Black economy remains a challenge for Fiji and the Pacific, believes Fiji Revenue and Customs Authority acting chief executive, Visvanath Das. Mr Das stressed a possible reason for this
15 Sep 2016 11:54
Black Economy Labelled A Challenge
Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum at the Pacific Island Tax Administrators Association (PITAA) 13 Heads meeting at the InterContinental Fiji Golf Resort and Spa, Natadola yesterday. Photo: WAISEA NASOKIA

 

Black economy remains a challenge for Fiji and the Pacific, believes Fiji Revenue and Customs Authority acting chief executive, Visvanath Das.

Mr Das stressed a possible reason for this could be not so well-developed financial systems in the Pacific thus the preference of use of cash financial dealings.

Mr Das made these comments during the Pacific Island Tax Administrators Association 13 Heads Meeting yesterday at the InterContinental Fiji Golf Resort & Spa in Natadola.

Simply put, black economy is the segment of a country’s economic activity that is derived from sources which falls outside of the country’s rules and regulations regarding commerce.

The activities can either be legal or illegal depending on what goods and/or services are involved.

And as a result of this concern, Mr Das said technological advancement will be one of the key discussion items on the agenda for the meeting over the two days.

The meeting was opened by the Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum, who shared similar statements.

Mr Sayed-Khaiyum referred to a study undertaken by the World Bank on the Fijian economy in 2007 which was later published in 2007.

He said the study findings revealed that one third value of our GDP was in black.

“You can extrapolate from that and see how much tax revenue we have lost out,” he said.

“Therefore, I think it is very critical for us to have that level of sharing of information in the Pacific. Whilst we may differ in our strategies, it is important to have that level of interaction.”

 

Focus of the meeting

Mr Das said the meeting will look at how the Pacific Island countries can better their tax administration and ensure taxpayers pay their fair share.

“One of the challenges Pacific Island countries have is that the private sector have probably taken to technology for record keeping and various business transactions,” he said.

“However tax administrations have only simply digitalised themselves.

“But out there in the market today, in order to work smart with our limited resources, there are systems which needs to be developed in terms of risk profiling.”

 

Challenges for tax administrations

The fact that tax revenue leakage is a big issue not only for the Pacific but globally, Mr Das said the globe has become sort of more open in terms of e-commerce.

Therefore, he said some of the topics to be discussed during the meeting would be tax base erosion and profit shifting which are some current challenges of the tax administrations.

The internet space of trade, e-commerce and how these transactions happen and catching these transactions for taxation is a challenge, Mr Das said.

He emphasised it is a challenge in the sense of IT capability as well.

He said Fijian Government’s introduction of VAT Monitoring System was another item on the agenda for discussion which Fiji was keen to share with other Pacific Island countries.

“Fiji is much more advanced and other countries are looking up to Fiji on how we deal and handle situations,” Mr Das said.

The forum has a lot of interest from International Monetary Fund and the World Bank Group being major sponsors of the event.

Mr Das said the main idea was to get on par with international development.

Meanwhile, Fiji has been elected to chair the meeting this year.

Mr Das said Fiji is taking leadership in terms of assisting other member countries in terms of learning and sharing experiences.

Edited by: Rachna Lal

Feedback:  arishma.narayan@fijisun.com.fj


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