Underground economy, revenue leakage is a concern

With the growth of the underground economy, the increase in revenue leakage, the introduction of new technologies that can be both a catalyst and a disruptor for businesses. And the rapidly changing business models of the

With the growth of the underground economy, the increase in revenue leakage, the introduction of new technologies that can be both a catalyst and a disruptor for businesses.

And the rapid evolution of 21st century business models has made the collaboration of tax administrators more relevant and timely.

The remarks were made yesterday by Fiji’s Director General of Tax and Customs Services Visvanath Das during the Pacific Islands Tax Administrators Association Heads Meeting at the Tanoa International Hotel in Nadi yesterday.

“This is why meetings such as the heads of PITAA will continue to be essential for PITAA member countries,” Das told tax administrators from the 16 countries attending the meeting.

“We have the opportunity to proactively engage in dialogue, share experiences and learn from each other. “

Mr Das said that during Fiji’s tenure as Asia-Pacific Vice President of the World Customs Organization, one of the main lessons given that the secretariat keeps the central core and does not get too distracted by whistles and bells.

“As we explore this year’s Heads conference theme ‘Preserving the Pacific Region through Effective Revenue Mobilization’, it requires us to ‘rethink and re-evaluate the way we do business and look to the horizon in terms of trends, best practices, risks and pragmatic solutions that fit into the contexts of our National Administration.

“The context is critical. Although the solutions for large economies may be slightly different from those for smaller ones, the fundamentals remain the same – we all want to raise revenue so that we can finance public goods and services, which keep our communities healthy, safe and secure. sustainable.

“At the same time, we all aspire to economic growth. “

He said Fiji is seen as a big brother in the Pacific.

“For three years we have achieved an average economic growth of three percent per year and in the last fiscal year the FRCS service exceeded its revenues by 10 percent from the previous year.”

“This is fueled by increased investment, broader tax regimes and strong demand due to fiscal policy.”

He said one example was in the 2018 Budget announcement, where the government increased the income tax threshold to $ 30,000, which resulted in an increase in the circulation of cash of around $ 22 million. of dollars.

“However, despite the strong growth, several factors have dramatically increased revenue risks and the complexity and volume of service, audit and compliance interventions by tax authorities.

“These include the growth of international trade, supported by developments in electronic commerce, changes in employment models and the growth in the number of entrepreneurs, innovations in corporate structures and financial products, and the trivialization of tax regimes.

“The mobilization of domestic resources through fiscal reforms is essential to ensure sustainable financing for development.

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Shawn G. Randall

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