[Photo: File]
Billions of dollars in potential tax revenue could be slipping away across the Pacific through online services such as Netflix, Amazon, Booking.com and Airbnb.
While presenting the 2024–25 Annual Report to the Standing Committee on Economic Affairs, FRCS Chief Executive Officer Udit Singh said Fiji currently does not collect VAT on many payments made to overseas electronic marketplaces, even though the services are consumed locally.
He said an IMF report estimates Pacific countries are losing around four-billion U.S. dollars in revenue because electronic marketplace systems are not sufficiently developed.
Singh says FRCS is working to strengthen legislation and establish an electronic marketplace framework to recover some of the lost revenue.
“We are also working with the ATO in an initiative to look at an association of 38 global vendors that will be party to an electronic marketplace arrangement. In particular, what we are foregoing in these payments is VAT. Because the service is consumed in this country, we are foregoing VAT.”
Committee Chair Sakiusa Tubuna says lessons from FRCS’s engagements with overseas partners could create opportunities for more innovative ways of raising revenue and strengthening Fiji’s tax system.
“Have you thought about introducing some of the changes that are being implemented internationally in terms of changing the legislation relating to FRCS? I’m trying to understand your question better. Yes, in terms of the overall FRCS legislation. Have you, from the exchanges that you have had with your partners overseas.”
In response, Singh says the changes are aimed at ensuring Fiji can collect VAT on services consumed locally and prevent revenue from being lost overseas.
He adds that the initiative is expected to progress over the next 12 months.
