?FRCA surpasses first quarter target by $39m?

The Fiji Revenue and Customs Authority has surpassed its first quarter target by $39.1million, which is unprecedented when compared to previous years.

?The back-to-back significant levels of revenue growth rates (13.2% in 2013 and 12.2% in 2014) resonate increased economic activity,? FRCA Chief Executive, Mr Jitoko Tikolevu said.

?A number of revenue items have achieved record-breaking levels of growth rates. Although such positive revenue performance is expected in a period of rapid economic growth rate, it can equally be noted that revenue growths recorded in the 1st quarter of 2014 has been phenomenal relative to the GDP growth rate.

?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.?

Mr Tikolevu said there were a combination of factors that were driving the current revenue collections.

?There is no doubt that the current escalation in tax collection levels have been largely attributed to back-to-back solid economic performance with four years of positive GDP growth; the continued pro-growth and expansionary government policies; the restructuring of ?tax system towards low rate and base broadening; aggressive tax compliance and debt management strategies,? Mr Tikolevu said.

?In summary, it can be stated that increased Government expenditure and tax cuts were the effective policy mix to induce growth.?

VAT refunds issued by the Authority during the quarter increased by 35.1% over the same period last year.
?This is more than double the average growth rate of 15.9% seen in the same period over the last 10 years. As at 1st quarter 2014, a total of $87.1m was issued as VAT refunds.

?In the period of rapid VAT collections, it is anticipated that the amount of VAT refund will be higher and a total of $300m has been budgeted for 2014, which is 13.0% higher than the 2013 level.

?VAT refunds outstanding are about $57.9m, slightly lower than that recorded in December last year. However, there is continuous emphasis for FRCA to reduce this amount,? Mr Tikolevu said.

The level of tax arrears currently stands at $51.9m, which is an improvement of 14.8% over 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,? Mr Tikolevu said.

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MEDIA RELEASE.