Grace period for FBT payments

Caption: FRCA CEO Jitoko Tikolevu. File Photo.

A recent tax audit carried out by the Fiji Revenue and Customs Authority has revealed some very serious tax omissions. The omissions, which are on the Fringe Benefit Tax, are estimated to be in the millions.

FRCA Chief Executive Officer, Mr Jitoko Tikolevu said the Authority will offer a grace period until November 11, 2013 for taxpayers to comply.

“It has come to the attention of the Authority that a majority of employers who are lodging VAT Returns do not make the mandatory FBT adjustments,” Mr Tikolevu said.

“These are very serious omissions and are to be immediately corrected.

“All employers must register for Fringe Benefit if they provide fringe benefits.

“Any non-cash benefits provided by the employer are subjected to 20 per cent FBT.

“We urge taxpayers to comply and we have offered a grace period to ensure they do. When people don’t pay the right taxes, they are denying the state coffers and more importantly the provision of public services, which all citizens benefit from.”

In the first six months of this year, revenue collected from Fringe Benefit Tax was $8.2million, an increase from the $2.9million recorded for the same period last year.

Revenue collected from Fringe Benefit Tax in 2012 was $9.36million.

“All employers that are exempted from paying tax under the Income Tax Act or under any convention, but provide non-cash benefits to their employees, are required to add the value of benefits to the employees’ salary and deduct PAYE accordingly instead of applying FBT,” Mr Tikolevu said.

“Special audit teams will carry out routine inspection and auditing of FBT records to ensure compliance from all employers.

“We have reduced tax rates significantly in recent years, we have improved our processes to facilitate businesses and it is only right that our taxpayers exercise good faith and comply with the laws.

“Full statutory penalties will be applied to all employers who do not comply by 11th November 2013.”

Penalties include fines and imprisonment. They can be accessed on this link http://www.frca.org.fj/offences-and-penalties/

The following fringe benefits are subject to Fringe Benefit Tax:

  1. a debt waiver fringe benefit;
  2. a household personnel fringe benefit;
  3. a housing fringe benefit;
  4. a loan fringe benefit;
  5. a meal or refreshment fringe benefit;
  6. a motor vehicle fringe benefit;
  7. a private expenditure fringe benefit;
  8. a property fringe benefit; and
  9. a residual fringe benefit.

More details on the Fringe Benefit Tax can be found on http://www.frca.org.fj/fringe-benefit-tax/. 

Press Release

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