Fiji is initiating a significant effort to tackle the underground economy with the establishment of a Tax Compliance Task Force within the national tax office. This initiative was formally introduced by Deputy Prime Minister and Minister of Finance Prof. Biman Prasad, who emphasized that the aim is not to persecute individuals but to ensure that every taxpayer fulfills their obligations.

Prasad highlighted that most businesses and citizens are compliant with their tax responsibilities, stating, “We recognize that a majority of the businesses, majority of Fijians are doing the right thing, they’re paying their fair share of taxes.” However, he pointed out that tax evasion by a small number has negative implications for Fiji’s economy, asserting the need for robust strategies to address this issue.

The full scope of the underground economy, often referred to as the “shadow economy,” remains unclear, and the task force seeks to quantify this hidden financial activity. Udit Singh, CEO of the Fiji Revenue and Customs Service (FRCS), explained that the objective is to understand the scale of tax non-compliance and establish a framework for addressing it. This framework is expected to be developed within the next two months and is being supported by collaboration with international partners, including the Australian Tax Office.

The chair of the task force, chartered accountant Nitin Gandhi, stressed the importance of adapting to the changing landscape of tax administration in Fiji, which now includes the challenges posed by multinational enterprises (MNEs). He warned that tax avoidance and evasion threaten the integrity of Fiji’s tax system and overall economic stability.

This proactive approach not only aims to strengthen the country’s tax revenue system but also fosters a fairer economic environment for compliant taxpayers. The work of the task force serves as a reminder of the importance of accountability and transparency in the financial sector, paving the way for a healthier economy.

Overall, Fiji’s steps to address tax compliance highlight a commitment to fairness and the importance of every citizen contributing to the nation’s growth, which is a hopeful sign of potential economic improvement and sustainability for the future.