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SUVA, Fiji (Fijilive, Oct. 10) - Fiji’s tax arrears at August end has topped $168 million [US$108 million], an increase of about 33.5 percent from that recorded in the same period last year, Finance Minister Mahendra Chaudhry has revealed.

To reduce the tax arrears level, Fiji’s tax defaulters have been given an amnesty period from 15 October to 16 November to pay their over due taxes by the Fiji Islands Revenue and Customs Authority (FIRCA).

Cabinet endorsed this tax amnesty yesterday based on a submission by Chaudhry. Chaudhry explained that tax amnesty is generally defined as a limited time opportunity where tax defaulters have an opportunity to absolve their interest and penalties relating to overdue tax without fear of prosecution.

"Tax amnesty is a fiscal policy tool used by governments around the world primarily to raise revenue. Its duration could be one-off, intermittent or permanent and its coverage of tax evaders, periods, components of tax base, etc., varies."

Chaudhry said the aim of the tax amnesty is to generate maximum revenue from tax arrears without the costs associated with audit and enforcement, and reduce the tax arrears levels. He said that the tax amnesty will also help increase the tax base by encouraging taxpayers who have not filed their returns to register and file returns for tax purposes.

Chaudhry said the amnesty would be in relation to all penalties, if the taxpayer settled his tax arrears in full during the period of amnesty.

Penalties to be waived include income tax (late lodgment penalty (LLP), omitted income penalty (OIP), insufficient advance payment penalty (IAPP) and late payment penalties (LPP); and value added tax (late lodgment penalty, incorrect return penalty and the late payment penalty).

"The amnesty will apply to all income tax as well as hotel turnover tax, gambling turnover tax, land sales tax and value added tax (VAT).

"Furthermore, the amnesty will also apply to the waiving of penalties for those non-filers who will voluntary file their returns during the amnesty period."

Chaudhry said this is to encourage taxpayers to register for tax purposes and/or file outstanding returns.

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