[Photo: File]

Parliament has raised concerns over the Fiji Revenue and Customs Service’s record $3.104 billion revenue collection.

The scrutiny centres on higher taxes, $109.5 million in penalty waivers and major compliance gaps.

Opposition MP Premila Kumar states the figure cannot be viewed in isolation.

She said the key question was how much of the growth came from genuine economic activity and how much was driven by higher taxes on Fijians and businesses.

Kumar says VAT increased from nine to 15 per cent, while corporate income tax rose from 20 to 25 per cent.

She says VAT collections increased by 35.8 per cent, while corporate income tax collections grew by only 7.9 per cent despite the higher rate.

Kumar says the figures raise concerns about the effect of higher taxes on household spending and businesses.

She also called for greater transparency over the $109.5 million in penalties waived or withdrawn by FRCS.

Kumar says taxpayers should know who received the waivers, the reasons for them and who approved them.

Standing Committee on Economic Affairs Chair Sakiusa Tubuna said the record collection was commendable but was influenced by policy changes, including higher VAT and corporate tax rates.

The committee identified about 116,800 MSMEs in the tax compliance gap, with only about 20 per cent actively paying taxes.

Tubuna says the committee has made eight recommendations to improve compliance, revenue collection and accountability.

He also highlights financial scams and says FRCS should work with the Fiji Financial Intelligence Unit and Reserve Bank of Fiji to address the growing problem.

Finance Minister Esrom Immanuel says reforms are underway to address the committee’s concerns.

Future FRCS annual reports, he said would provide clearer comparisons between revenue targets and actual collections, including explanations for major differences.

Immanuel also states that penalty waivers are governed by a formal framework with eligibility criteria, approval controls, audits and documentation requirements.

Deputy Prime Minister and Trade Minister Manoa Kamikamica rejects criticism of the revenue increase and penalty waivers.

He says the steady rise in collections over three years reflects genuine economic growth and FRCS reforms.

Kamikamica says the Opposition cannot demand lower taxes and higher government spending while also calling for smaller deficits without explaining how the gap would be funded.

He also points to a $70 million Capital Gains Tax exemption introduced by the previous government.

Kamikamica said FRCS was also working to improve MSME compliance through simpler accounting systems and digital tools.

Government MP Professor Biman Prasad also defended the revenue performance.

Prof Prasad states that the government inherited high debt and a tax system that allowed an estimated $500 million to $600 million in annual revenue leakage.

He said reforms closed much of the leakage, while VAT was later reduced from 15 to 12.5 percent and revenue collections continued to rise.

Prof Prasad says economic growth also contributed, with the economy expanding by 9.4 percent in 2023, more than 3.5 percent in 2024 and more than 3 per cent in 2025.

Parliament has unanimously noted the contents of the Review Report on the FRCS Annual Report 2023–2024.