FRCS targets lost VAT revenue

Fiji's tax authority is pursuing billions of dollars in lost revenue by targeting foreign digital service providers. The Fiji Revenue and Customs Service (FRCS) currently misses out on Value Added Tax (VAT) from services like Netflix, Amazon, Booking.com, and Airbnb, which are consumed locally but provided by overseas companies.

FRCS Chief Executive Officer Udit Singh stated that an International Monetary Fund report estimates Pacific countries are losing around four billion U.S. dollars annually due to underdeveloped electronic marketplace systems. "Because the service is consumed in this country, we are foregoing VAT," Singh explained during the presentation of the 2024–25 Annual Report.

To combat this, the FRCS is strengthening legislation and establishing an electronic marketplace framework. Singh mentioned an initiative with the Australian Taxation Office (ATO) involving 38 global vendors to create an electronic marketplace arrangement. These efforts aim to ensure Fiji can collect VAT on services used within the country and prevent revenue leakage.

Committee Chair Sakiusa Tubuna suggested that lessons learned from FRCS's international engagements could foster innovative revenue-raising methods and bolster Fiji's tax system. Singh confirmed that legislative changes are underway, with the initiative expected to advance over the next 12 months to recover 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.