Tax regime 'attractive' for investment: FRCA

Fiji's current tax regime with low tax rate is very attractive to investors and is building their confidence back into our economy, says the Fiji Revenue and Customs Authority.

FRCA National Manager Policy and Research, Fazrul Rahman in his presentation at the second session of the Fiji Economy Update in Nadi said their emphais has always been solid compliance and over the last 10 years and a
series of tax compliance were brought to the Income Tax Act such as new anti- avoidance provision, introduction of departure prohibition order, temporary closure of business and tightening the provisions on Garnishee order.

“Now that the 2012 Budget tax policy reform has reduced the tax rates in large magnitude, FRCA is promoting a culture of voluntary compliance."

"Fiji’s tax regime was very attractive with low tax rate although it had followed a trend of reducing tax of income and increase VAT between 1997 to 2012 period.

“The 2012 Fijian Budget has positioned the country as an attractive tax regime. The expansionary fiscal policy in the form of tax cuts in the Budget is achieving the objective of building confidence and raising investment,” Rahman said.

Quoting the Reserve Bank of Fiji’s August 2012 Economic Review, he said the investment to GDP ratio for 2012 was projected to be 18 per cent compared to the 16 per cent seen in 2011.

“The 2012 Budget has also retained the level playing field for local and foreign businesses as created such alignment between different types of taxpayers."

“By virtue of tax rates being reduced to 20 per cent for individual and businesses, it has ensured that irrespective of which form business ownership takes place, the tax rate is same," he concluded.

By Reginald Chandar