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THIRD PHASE OF THE VAT COMPLIANCE CAMPAIGN

“TAXPAYERS LODGING NIL VAT RETURNS WHILST ISSUING VIP INVOICES”

The Fiji Revenue and Customs Service (FRCS) now enters the third phase of the VAT Compliance Campaign. This phase will specifically target taxpayers who are lodging Nil VAT returns despite continuing their business operations and issuing VAT Inclusive Price (VIP) invoices. Although these VIP invoices are commonly used by VAT-registered businesses (B2B – Business to Business), sales made to other customers often remain undisclosed, potentially indicating higher actual sales for these taxpayers.

It has come to our attention that for the years 2020 – 2023, there are 2,347 entities who have issued invoices with VAT-inclusive prices (VIP) surpassing $100 to other VAT-registered entities. These taxpayers have submitted Nil VAT returns for the corresponding periods which comes to $401.6m in VIP Sales. This non-compliant conduct has enabled taxpayers to claim VAT input credits in their VAT returns.

Additionally, it has been observed that certain taxpayers use multiple Taxpayer Identification Numbers (TINs) through which they declare income and issue VIP invoices. Some of these taxpayers are submitting nil returns using different TINs than the ones under which their income has been declared.  The TINs for which the VAT has been claimed and from which the service has been provided must match.

FRCS is committed to fostering tax compliance and providing support to taxpayers in meeting their obligations. We encourage taxpayers to take advantage of the resources available, including our customer service centre and online video tutorials. In addition to these resources, FRCS also launched the VAT Guide on 3rd November 2023. Supported by a step-by-step guide and illustrations, the VAT Guide aims to simplify taxpayer understanding of their VAT obligations.

FRCS wishes to advise that it is a serious offense under Section 71 of the Value Added Tax Act 1991 to knowingly lodge a false VAT return.

FRCS will publish the TINs of these taxpayers who are lodging Nil VAT returns and wishes to advise that time will be given till 30th June 2024 to amend their VAT returns voluntarily.

Should you fail to update your VAT and Income Tax (where applicable) returns by 30th June 2024, FRCS will initiate audit assessments, enforce strict penalties according to Section 46 of the Tax Administration Act 2009 for false or misleading statements and may pursue prosecution for the tax offense under Section 72 of the Value Added Tax Act 1991.

The 2,347 list of TINs can be accessed by clicking on this LINK

For further information, inquiries, or assistance, please do not hesitate to contact our customer service centre or visit our website www.frcs.org.fj for educational resources and guidance or email on managetaxreturns@frcs.org.fj.

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