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33pc in the shadows

Ropate Valemei
Sunday, December 09, 2012

WHILE there has been no recent indepth report on the extent of the shadow economy in Fiji, it consists of at least 33.8 per cent of the economy.

This was revealed by the Fiji Revenue and Customs Authority in a 2005 report by Professor Friedrich Shneider of Austria's Johannes Kepler University of Linz, Austria on shadow economies and corruption in 145 countries.

FRCA chief executive officer Jitoko Tikolevu said the most common offences were committed by exporters, importers and customs agents.

Shadow economy is the part of an economy involving goods and services which are paid for in cash, and therefore not declared for tax.

Mr Tikolevu said offences included the under valuation of goods to avoid payment of duties, abuse of concessions, importations of prohibited goods; incorrect tariff classification; incorrect years of manufacture (for example, motor vehicles); double invoicing and breach of warehouse procedures.

FRCA is urging members of the public to pay the correct tax and duty and lodge returns at the right time.

"FRCA has taken the step to raise awareness on corruption this year by implementing initiatives to curb corruption externally as well as internally," he said in a statement.

The authority recently implemented a whistle blower policy.

A whistle blower in this case refers to any employee, member of management or board from outside the authority.

"A whistle blower that provides information or documents to the authority contributing significantly to the success of the investigation and prosecution by the authority shall be entitled to at least 10 per cent of the tax revenue recovered as a monetary or non-monetary reward."

Mr Tikolevu said cases referred to audit compliance (Tax Division) would be handled, like all other cases, with utmost secrecy.

"Information provided will usually be verified for authenticity and tax issues and risks are risk profiled and identified in relation to tax and revenue leakages."

He said this was to determine omission of income in accordance to the various legislation administered by FRCA.

He emphasised the authority would ensure a whistle blower could make any disclosure without fear of victimisation or discrimination.

The public is advised that whistle blowing in relation to FRCA staff should be directed to the CEO or the office of national manager internal assurance.





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