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Fiji's Revenue Collections Beyond Expectations

by Mary Swire, Tax-News.com, Hong Kong

15 April 2014


In what was seen as an indication of steady Fijian economic growth, Fiji's Revenue and Customs Authority (FRCA) revealed that it surpassed its first quarter 2014 target revenue by FJD39m (USD21.2m), or 12.2 percent, and collected a total of over FJD431m in income tax, value added tax (VAT), customs duties and other taxes.

"The back-to-back significant levels of revenue growth rates (13.2 percent in 2013 and 12.2 percent in 2014 reflect increased economic activity," said FRCA Chief Executive, Jitoko Tikolevu. "A number of revenue items have achieved record-breaking levels of gross domestic product (GDP) growth rates."

"Although such positive revenue performance is expected in a period of rapid economic growth rate, it can equally be noted that revenue growth recorded in the first quarter of 2014 has been phenomenal relative to the GDP growth rate," he added. "Revenue is growing four times more than the real GDP growth rate, and this high elasticity reflects the continued economic multiplier effect of new investments, spending and consumption. It signifies prevalence of high aggregate demand in the Fijian economy."

Tikolevu also attributed the current high revenue collections to the restructuring of the tax system with lower income tax rates and an additional concentration on indirect taxes, together with aggressive tax compliance strategies.

For example, despite the cut in both individual and corporate rates, income tax revenue in the first quarter of this year rose by 20.4 percent over budget to FJD86.5m, while the expanded VAT and customs duties collected 6 percent and 4.3 percent more than target, at FJD171.4m and FJD98.1m respectively.

With regard to tax compliance, the level of tax arrears currently stands at FJD51.9m, which is an improvement of 14.8 percent over the December 2013 level. "We thank our taxpayers for continuing to be compliant. And for those that are still dodging the system, we remind you that paying taxes is your civic duty," he concluded.

TAGS: compliance | tax | economics | value added tax (VAT) | tax compliance | fiscal policy | gross domestic product (GDP) | budget | corporation tax | Fiji | import duty | revenue statistics | individual income tax

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