The rollout of the next phase of the Value-Added Tax Management System faces challenges but the Fiji Revenue and Customs Service is confident it can overcome them.

During a post-budget symposium session over the weekend, concerns were raised about Small and Medium Enterprises struggling with system compatibility issues and high costs from past implementations.

FRCS CEO Udit Singh acknowledged these challenges, explaining that Fiji’s large shadow economy is a key reason for lowering the VMS threshold to bring more businesses into the formal sector through digitisation.

He also mentioned that a free, low-cost point of sale system is being developed to ease the transition for small businesses.

Finance Minister and Deputy Prime Minister Professor Biman Prasad.

Finance Minister and Deputy Prime Minister Professor Biman Prasad confirmed the government had paused the second phase of the VMS rollout after hearing business concerns.

He said this time the rollout would be smoother, with FRCS well prepared to handle any issues. He clarified that the VAT threshold remains unchanged while the VMS threshold has been lowered.

On a related note, Prof Prasad addressed the need to diversify Fiji’s food supply chain, pointing out the high costs of importing from traditional suppliers like Australia and New Zealand and the barriers caused by outdated biosecurity regulations.

He explained that biosecurity rules were set decades ago and need to adapt to today’s more complex and diversified markets. He gave the example of ghee, which Fiji imports indirectly at higher prices because direct imports from India are currently not allowed.

Prof Prasad also emphasised that protection for local industries, such as chicken producers, comes with the responsibility to keep pricing reasonable and supply adequate.

He noted that protection is meant to be temporary, lasting five to ten years, but some sectors have been protected for much longer.

He added that duty reductions are intended to benefit consumers by lowering prices and stressed the government is working carefully with biosecurity authorities and industry to open supply chains while still protecting local producers.

The government’s approach, Prof Prasad states, aims to modernise trade and tax systems while supporting businesses and consumers through measured reforms.

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