27 October, 2016, 12:00 am
THE Fiji Revenue and Customs Authority is embarking on a 30 day Voluntary Declaration period for Residential rental operators to come forward and declare their previously undeclared rental income and also provide updated information. The 30 day declaration period will begin on November 1, 2016 and will end on November 30. This week FRCA chief executive Visvanath Das will discuss more on Voluntary Compliance for Rental Income with senior business reporter ROPATE VALEMEI.
TIMES: Why if FRCA embarking on this Declaration period?
DAS: The aim of the exercise is to promote voluntary tax compliance and encourage everyone to take responsibility towards their tax obligations. While FRCA has an option to conduct tax audits and detect under-reporting of income, it seeks to pursue partnership and create an environment where taxpayers can freely come forward to disclose the right information. We all have a responsibility towards paying the correct taxes and it is therefore important that taxpayers take advantage of this initiative.
TIMES: As a Residential Rental Operator what do I need to do?
DAS: You are required to fill in the FRCA Voluntary Tax Compliance Initiative — Rental Income Declaration Form which you can download from the official FRCA website www.frca.org.fj or collect from any of the FRCA offices Fiji wide.
TIMES: Who is required to fill the Rental Declaration Form?
DAS: Individuals and companies that have not declared rental income received by renting out their homes and properties are required to fill and complete the Rental Declaration Form. This also includes home owners who are providing “home stay” facilities and have not been declaring this in their tax returns.
TIMES: As landlord, I have been lodging my tax returns, however I have not fully declared my rental income. What am I required to do?
DAS:As an individual you are required to lodge an amended tax return (Form B Return) for all those years where you had under-declared your rental income. If you are a company then you need to lodge an amended company return .
TIMES: How about in cases where the landlord has never declared any rental income at all. What is required of the landlord?
DAS:First you need to register for a Tax Identification Number (TIN). Once registered, you are required to complete and submit the Rental Income Declaration Form. If you operate a business, you will need to lodge either the business (Form B) or company (Form C) tax returns and declare all your sources of income.
TIMES: Some landlords may not know how to compile tax returns. How can they be assisted?
DAS: They can engage the services of the registered tax agents who will assist you for a fee. A list of approved Tax agents is available on our website www.frca.org.fj at any FRCA office. Alternatively they can seek assistance from FRCA officers at any Customer Enquiry Centre are willing to provide guidance for free.
TIMES: What forms and documents am I required to submit in order to meet the Tax Compliance requirements?
DAS:You will need to lodge your Income Tax Return, where you had understated income in the previous returns the landlord may lodge an Amended Return for under-declaring or not declaring rental income at all. The land- lord will also have to complete the Rental Income Declaration Form. FRCA may request documentary evidence to support your income declared such as copies of rental agreements and contracts where available, summary of receipts, bank deposits, bank statements etc.
TIMES: What will happen if someone fails to declare his or her rental income in the tax returns to FRCA?
DAS:Severe penalties will be imposed on customers who falsely declare their rental income. Our audit and compliance unit will inspect for under-reporting of income by any taxpayer and if found that the landlord evaded tax by failing to lodge or failing to report the right income, amended assessments are raised.
TIMES: What happens to the information a landlord provides in the declaration?
DAS: We will update the landlords records with this latest information and also verify the correctness of the tax returns lodged to FRCA to ascertain whether the correct taxes have been assessed and paid.
* NEXT WEEK: More on voluntary compliance for rental income.