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Millions lost in revenue

Luke Rawalai
Tuesday, November 07, 2017

FIJI continues to lose millions in revenue every year from the sale of prime lands handled by illegal foreign real estate agents that run away with commissions overseas.

Speaking during the recent Real Estate Agents Licensing Board's consultation in Savusavu, Ki Maren Real Estates director Aren Nunnink said foreign agents normally travelled into the country under tourist visas.

Mr Nunnink said all transactions were paid in millions and were handled by foreign agents, and parties to the trade who also evaded tax with money taken offshore.

"As these agents don't reside in Fiji and are not answerable to the laws of the country, they can collude with both the seller and buyer to put a false price on the transactions," he said.

"They can negotiate the price of properties. So maybe if the price if $5 million, on that type of transactions the seller is liable to pay the capital gains tax and the buyer is liable to pay the stamp duty.

"However if the foreign agent is not subject to any penalties here he can collude with both parties to lower the disclosed price and in that scenario Fiji Revenue and Customs Service (FRCS) misses out on stamp duties that the buyer is to pay.

"Therefore if the disclosed price is $3 million, then $2 million goes under the table and that is revenue the country is losing."

Mr Nunnink said agents in Fiji were subject to the Suspicious Transaction Reporting Act where they had to report dealings that they suspected involved money laundering.

"Foreign agents are not subject to that and some of these high value transactions involve bringing in money they have not paid taxes on and so again since they are not subject to these acts, they are open to illicit dealings," he said.

"We want to see the REALB along with FIRCA and the Immigration Department deal with these illegal acts."

Responding to these views the board's acting executive officer Virisila Tuimanu said all views aired during the consultation would be considered in the legislation review works they were undertaking.

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