Environmental Levy

List of STT Registered persons as at 15th January 2016

Business & Self-Employed

 

What it is? 

In the 2016 Budget announcement, the Minister for Finance has announced the introduction of the Environmental Levy (EL) that reinforces Government’s commitment for all Fijians the right to a clean environment.  The levy would mostly be applicable to Visitors that come for the luxury of the accommodations and the natural beauty and recreational opportunities in Fiji, and they will have to pay a small additional charge to support environmental protection programmes.

 

The Environmental Levy will be levied at the of rate 6% on the ‘turnover’ of prescribed service providers effective from 1st January 2016 or in other words Environmental Levy must be charged or levied on prescribed services listed under the Schedule of the Environmental Levy Act. ‘Turnover’ means the total charges for prescribed services billed to consumers.

 

Who should register for Environment Levy (EL)?

For those service providers who are currently registered for Service Turnover Tax do not have to register as FRCA will automate their Environmental Levy registration

 

For new businesses, the owner or person who is responsible for the daily management of a prescribed service (Accountable Person) should register with FRCA once they become liable or legally responsible to register. The Accountable Person should first obtain a Tax Identification Number (TIN), and then register for EL purposes. Registration must be done within 30 days before the business commences. In general, the Environmental Levy applies to licensed businesses. However, where a person may not have the necessary permits to operate, the person will be deemed to be registered for Environmental Levy, if their operations fall within the description of prescribed services.

 

EL Registration Form

Who is an Accountable Person?

“Accountable person” can be any one of the following persons – the owner, manager, sole precedent partner or any person who is responsible for the daily management of the prescribed service.

Liability to register upon reaching the taxable threshold

For the following prescribed services, registration depends upon a ‘taxable threshold’:

  • Bistros and coffee shops – turnover $1.25 million and more
  • Provision of meals/beverages in a licensed restaurant – turnover $1.25 million and more

 

Once the above persons reach the taxable threshold, they should register so that they can start including EL in their service charges. The effective date to start accounting for EL is the month of registration.

Services that will be subject to Environmental Levy are as follows:

Service provider Services subject to EL
1. Licensed hotels Accommodation, refreshments and any other services.
2. Tourist vessels operating within Fiji waters Accommodation, refreshments and any other services provided on board.
3. Licensed bars Meals, beverages and any other services provided in a licensed bar. This includes licensed bars located, for example, in private clubs.
4. Licensed Nightclub Services such as music, dancing or other entertainment including other services
5. Inbound tour operators Travel, tour and sight-seeing services.
6. Organizers of entertainment programs /product exhibitions Entry fees to the events venue.
7. Recreational Activity operators Recreational activities provided by these operators Eg. Skydiving
8. Cinema Operators Entry fees and all services provided within the cinema premises.
9. Licensed Rental/hire car operators With effect from  01/01/15 any hire of chauffeur driven  motor vehicles. This applies to motor vehicles that –

  • come  with a driver
  • does not have a meter
  • the fare is negotiated or is fixed

 

Includes vehicles with ‘LH’  license plates. it

It does not include the hire of taxis

Hire of rental cars and other  transport services by a  rental car operator

10. Bistros and coffee shops Meals, beverages and other services. This only applies to service providers with a gross turnover of  over $1.25 million dollars
11. Licensed Restaurants Meals, beverages and other services. This only applies in licensed restaurants with an annual gross turnover of over $1.25 million dollars.
12. Aircraft operators This applies to charter flight services except for charter flights for medical or natural disaster relief evacuations services are not subject to STT and EL.
13. Water sports operators All water sports activities including river safaris.
14. Home stay operators Accommodation and other services provided in a private residence or property that accommodates tourists, international students or overseas visitors who are paying guests. It does not apply to hostels/accommodation operated by public educational institutions.
15. Unlicensed service operators If a service provider is not licensed but meets the registration requirements and, it will be required to register and charge EL on the services provided.

 

 

 

Who is responsible for collecting EL?

The Accountable person must account for Environmental Levy (EL) collected and any correspondence or queries on EL will be sent to him/her.

 

Accounting for EL

The Accountable person must account for EL in monthly returns. An EL return should be completed and submitted with a cheque/cash for the EL applicable on the turnover for that month by the end of following month.

 

EL Return. The forms are available at our Customer Service Centres.

 

Will the service providers be required to lodge Environmental Levy Returns separate from the STT Return and the VAT return?

Yes, a separate return will be required for the Environmental Levy and the person accountable must submit a return together with the tax payment by the end of the month following the month in which the levy was collected. The due date for lodgment of the Environmental Levy Return is also the due date for payment of the levy.  Example: Environmental Levy collected in January 2016 must be paid to FRCA by 29 February 2016.

 

Do companies still have to lodge a monthly return if no Environmental Levy was collected? 

In cases where the business continues to operate but there is no Environmental Levy to report for a period, a return indicating that there was no turnover for that particular period must be submitted.  Accountable persons will be required to keep records to support the computation of the Environmental Levy. Penalties apply for failure to comply with any of the provisions of the Act.

 

Guidelines for calculating Environmental Levy

The two tables below show how the gross amount paid by a hotel guest should be calculated if a hotel owner is registered for Environmental Levy, STT and VAT purposes.

Table 1 [manual records]

No. Transaction Type Charges (VEP) Environmental Levy (6%) STT (10%) VAT (9%) Total
1 Accommodation $100 $6 $10 $9 $125
2 Refreshments $50 $3 $5 $4.5 $62.50
Total $150 $9 $15 $13.5 $187.50

 

Table 2 [system-based records]

No. Transaction Type Charges (VIP) VAT (9%) Charges (VEP) Environmental Levy (6%) STT Total
1 Accommodation $109 $9 $100 $6 $10 $125
2 Refreshments $54.50 $4.5 $50 $3 $5 $62.50
Total $163.50 $13.5 $150 $9 $15 $187.50

 

The table below shows how the gross amount paid by a hotel guest is calculated where the hotel owner is not registered for VAT.

Table 3 [when service provider is not registered for VAT]

No. Transaction Type Charges (VEP) Environmental Levy (6%) STT Total
1 Accommodation $100 $6 $10 $116
2 Refreshments $50 $3 $5 $58
Total $150 $9 $15 $174

 

Displaying Prices

Service providers must charge and display prices to clearly identify the total cost inclusive of the taxes applicable therefore these service providers must issue invoices inclusive of the Environmental Levy and other taxes for customers to be aware what they are paying for.

Under the VAT Decree, registered persons are required to display the price of all prescribed services supplied at the retail level in Fiji as inclusive of tax (if any) chargeable on that supply.   However, tourism publicity material utilized overseas to advertise the supply of any goods and services by any registered person may be displayed as exclusive of tax (if any) chargeable on that supply, provided that any tourism publicity material on which an exclusive of tax price is displayed must clearly state that the price displayed is subject to the tax.   When issuing the receipt the respective tax components should also be clearly shown to customers.

 

Record Keeping (Section 34 of TAD 2009)

  • EL accounts and records should be kept  for at least 7 years
  • if a  person  wants to discard records before the end of the 7-year period, they must make an application in writing to the CEO.

 

Environmental Levy Penalties

  • Any EL remaining unpaid after the due date for payment – 25% Late Payment Penalty applies.
  • If lodgment is late, 20% Late Lodgment Penalty will apply on the outstanding amount on the return.
  • An additional 5% late payment and late lodgment penalties will apply for each month of default on the unpaid tax.
  • Deliberate failure to maintain proper records – penalty equal to 75% of the amount of tax payable.
  •  Failure to maintain proper records due to ignorance or other reasons –  penalty equal to 20% of tax payable.
  • Deliberate false or misleading statements – penalty equal to 75% of the amount of tax shortfall.
  • Unintentional mistakes leading to incorrect returns – penalty equal to 20% of tax payable.

 

Offences

The courts can impose a maximum fine of FJ$15,000 or to imprisonment for a term not exceeding 12 months or to both a fine and imprisonment for the following offences:

  • Failure to file EL return
  • Failure to comply with obligations under Tax Administration Decree.
  • failure to produce any books or records relating to the turnover and collection/payment of EL

 

The courts can impose a maximum fine of FJ$25,000 or to imprisonment for a term not exceeding 24 months or to both a fine and imprisonment for the following offences:

•      failure to allow authorized tax officials from entering the hotel premises to inspect turnover, collection or payment records

•       making false or misleading statements

 

Further information:

For more information, please call Mr. Epeli Naua on 3243505, Mr. Satish Dip on 3243770 or email info@frca.org.fj, or visit any of our office nearest to you.

 

 

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Lot 1 Corner of Queen Elizabeth Drive
& Ratu Sukuna Road,
Nasese,
Suva.
Phone: (+679) 3243000
Fax: (679) 3315537
Email: info@frca.org.fj