$1bn Tax Scam

Fiji Revenue and Customs Service believes it is owed an estimated $1 billion in taxes, through tax avoidance that includes value added tax (VAT) scam.

Chief executive officer Udit Singh's comment yesterday followed queries around revelations of $400 million in value added tax (VAT) avoidance. The estimated $400 million VAT scam are for the years 2020 to 2023.

FRCS believes an accumulated sum of VAT scam and tax avoidance hovers between $800m and $1 b.

Prison authorities may need a bigger budget allocation, to cater for the thousands of individuals who may be implicated in a staggering $400 million tax scam.

Fijian business leader Mike Towler, known to hold a stick to the government, made the remark yesterday, as the sum surfaced amid concerns over value added tax (VAT) avoidance.

This as the regional Pacific Islands Tax Administrators Association meets with Pacific Financial Technical Assistance Centre in Suva for a week-long workshop on tax complexities, where Finance minister Biman Prasad called on tax authorities to keep an eye on the big dogs, to bridge the gap in tax evasion.

Mr Prasad earlier suggested that the focus should not be so much on the smaller fries.

But the $400 million owed in VAT to the government, for 2022-2023, strongly pointed to the smaller businesses, Mr Towler said.

"More than 2000 entities passed on $100 in VAT to other registered entities," Fiji Revenue and Customs Service said.

“Prisons will need a bigger budget allocation because half the country is involved in value added tax,” Mr Towler said.

“Everyone tries to avoid VAT.

“Everyone asks for a cash price to avoid VAT; VAT tax avoidance is the second most popular sport in Fiji after rugby.”

This week, Fiji Revenue and Customs Service said VAT avoidance dues must be paid by the end of this month. Penalties incurred as a result of fraud against the State include a prison sentence.

The revenue and customs authority had published a list of tax identification numbers linked to nil VAT returns.

It recently followed up with a link of $400 million worth of VIP invoices, with invoice issuers who lodged nil VAT returns.

“This is a very big fraud,” Mr Towler said.

“Now that FRCS has put a number on this VAT fraud, they need to start going after these fraudsters.

“They are not large corporations; they are all small players; just a lot of them are doing it, and it adds up to $400 million.

“That is a lot of money and they need to recover it. They have until June 30 to fess up and pay the tax, before prosecution begins, to recover this huge debt.”

Feedback: frederica.elbourne@fijisun.com.fj