THE income tax decree to be introduced next year will save costs for the local business community and add efficiency to Fiji Revenue and Customs Authority (FRCA) operations.
FRCA national manager Policy, Economic Analysis and Research Unit Fazrul Rahman said the new decree would simplify the existing Income Tax Act.
"As you know the current Income Tax Act was introduced in 1974 and hasn't undergone a significant review, we feel that a review is necessary at this point in time to reflect business activities.
"This will also ensure that our tax laws are based on the best international tax laws."
Under the new income tax decree, employers will be required to lodge monthly tax returns for employees instead of one tax return being lodged at the end of the year.
The new decree will also turn PAYE tax into a final tax. It will also cut back on PAYE allowances with the only allowance made for children and this can only be claimed if a person's salary is under $20,000.
"The income tax decree will look at the substantive provisions of the tax law, we will talk about issues such as definition of income, expenses and tax treatment on specific issues like depreciation.
"We will also talk about moderate compliance provisions," Mr Rahman said.
He said Fiji's tax regime was very attractive compared to other countries in the region thanks to various tax policy reforms like the new income tax decree.
"We are not a highly taxed economy as we would have seen in the past few years," he said.