Monday, February 11, 2008

Minister’s tax data exposed

Sai's Comment:
Sad thing about this item is that all of Fiji knows who the Minister is. Yet the illegal interim PM neglects to do anything about him. Even worse when the Minister concerned is in fact the portfolio minister. Get who it is???? He is a power hungry, divisive and abrasive politician in Fiji. He is probably the most hated politician by Fijians.

Which Minister? - Tui Savu asks!

Since Victor Lal’s article in the Fiji Sun concerning a certain interim Minister who may have evaded tax, so much has been said with the most recent call from Hari Pal, Director of Transparency International (Fiji) imploring Bainimarama to investigate the serious allegation.

Political leaders, NGO’s and certain members of the public have in the past asked the same of Bainimarama, but he steadfastly refuses to do so.

Yet, when I read the various blog sites, I am bewildered to find, that the bloggers blog as if they already know the true identity of this interim Minister.

I would like to cut to the chase and ask Mahendra Chaudary whether he is the interim Minister, Victor Lal alleges may have evaded tax?

If, he unconditionally denies this allegation, then I request the various blog administrators to apologize to Mahendra Chaudary; act more responsibly in your role as administrators and to the bloggers, to please curtail your defamatory comments forthwith.

However, if no comment is forthcoming or it is unsatisfactory, then I ask Victor Lal to kindly reveal his/her true identity and put this issue to rest once and for all.

Tui Savu.

Townsville. QLD.

Probe Minister, TI asks FIRCA - Monday, February 11, 2008

TRANSPARENCY International is calling on the cabinet minister allegedly involved in a tax evasion scam to step aside and allow for a full transparent investigation into the matter.

Hari Pal Singh, chairman of TI Fiji expressed dismay at recent revelations in the print media of tax evasion attempts by a senior member of the Interim Cabinet and a consultant hired by Fiji Island Revenue and Customs Authority.

Transparency International calls on the Board of FIRCA to deal with these and other such cases independently, transparently and decisively without fear of manipulation by outside forces, political or otherwise or influenced by people pulling ranks.

Transparency International believes that if there is a senior Cabinet Minister involved in such a scam he should do the ethical thing and step aside pending full and transparent investigations in his or her tax issues. he said.

Transparency International calls on the Interim Prime Minister to ask his minister if there is such a minister, to step down pending full investigations to maintain the integrity of the Cabinet.

He said Transparency International also called upon the Reserve Bank of Fiji and the Fiji Intelligence Unit to fully investigate the circumstances against which a resident of Fiji is alleged to have accumulated such large assets abroad and whether requisite exchange control approvals were obtained to transfer these funds abroad of retained these funds if obtained from overseas.

If such approvals were in fact obtained RBF should publicly announce the policy upon which such approvals were granted, he said.

TIF believes that rule of law must prevail at all times and the same law should be applicable to all citizens of this country.

Go public, says Zinck

Monday, February 11,

THE Fiji Islands Revenue and Customs Authority Staff Association has called on an interim cabinet minister accused of tax evasion to go public.

Staff Association general secretary Kenneth Zinck said as a result of the probe, about 10 of his members were sent home.

"About 10 members have been sacked as they opened the tax file of the senior minister and questioned the minister," Mr Zinck said.

He said a member was sent home after being accused of disclosing information about the unpaid tax to the media.

"The minister should come clean and be honest. The interim Prime Minister should dismiss the senior minister."

FIRCA chief executive Jitoko Tikolevu denied claims that those who tried to recover the alleged tax debt were sent home.

Last updated 2/10/2008
An interim Cabinet Minister accused of systematic tax evasion when confronted by FIRCA as to why he did not disclose in his tax return interest earned from his Australian bank accounts, claimed he was holding the funds in trust for his community in Fiji.
But FIRCA, the Fiji Inland Revenue and Customs Authority, did not accept his explanation, as the Minister could not provide any evidence of a trust deed, and the bank accounts were in his name alone, it has emerged.
According to sources inside FIRCA, the non-disclosure was detected by FIRCA’s Income Matching Unit, which sent the cabinet minister (who was not a minister at the time) a letter asking him to explain the omission.
The minister was subsequently taxed on the omitted income over the period from 2001 to 2003.
As late as last year, he still had unpaid taxes on the interest of about $60,000. FIRCA staff who attempted to recover the tax debt were sent home, FIRCA sources claim.
According to FIRCA sources, the original data was sent to FIRCA from the Australian tax authorities, that each year report interest earned on Australian bank accounts by depositors who give the bank an address in Fiji.
The information, which related to the Australian tax year ended 30 June 2002, shows that the minister earned $A25,233 on his bank balance. Assuming a 5 per cent interest rate that means he had a balance of about $500,000. In the later years for which he provided documentation, after a query by the Income Matching Unit, he was assessed on higher amounts on a balance of $2million from various accounts.
The accounts were held in the ANZ and Commonwealth bank branches in Sydney. The banks deducted 10 per cent withholding tax of $1,204 leaving a net amount of $24,029 interest. The Australian tax authorities provided an Excel spreadsheet, which shows the minister’s date of birth, his address in Fiji and the actual payer (the two Australian banks).
The spreadsheet provided by the Australians to FIRCA was to assist in his identification.
Under Fiji’s tax law a resident of Fiji is taxable on his her her worldwide income. If they pay tax in a country which Fiji has a tax treaty with, such as Australia or New Zealand, they can get a tax credit in Fiji for the tax paid in the other country. However, the cabinet minister did not disclose this interest at all in his tax return and paid 31 per cent tax on it, less the 10 per cent credit for tax paid in Australia. FIRCA’s Income Matching Unit detected the non-disclosure.
According to FIRCA sources, the minister was sent the “please explain” letter. The minister came into FIRCA for interview and tried to explain it away by claiming that the funds were held in trust for his community but FIRCA officials did not accept it because he failed to produce the trust deed.
As a result assessments were raised on him.
The minister’s tax bill overall for the years 2001 to 2003, according to FIRCA sources, was $120,000. He had paid half of it by mid last year but $59,000 still was outstanding in tax and penalties. When one officer tried to collect the debt the officer was reportedly sent home, accused of leaking to me the minister’s tax details in August 2007.
An internal investigation was carried out and a board member, who is now a subject of rental property loss claims, was informed that there was no evidence against the officer.
The new documents add to the already damning evidence provided by me about the tax evasion by a serving cabinet minister, leading to private calls by FIRCA sources that the interim Prime Minister, Commodore Frank Bainimarama, suspend the minister concerned and an investigation be carried out about the tax evasion.
“If the Chief Justice is considered unworthy to be a judge because of his alleged tax evasion, then the same should apply to a Minister who is responsible for the running of the country. A coup was carried out to weed out corruption, and FIRCA even took out a full page advertisement calling on people to report tax evaders,” they said.
The sources said it was time FIRCA authorities stopped accusing the media of malice and political motivation against the Minister.
Here I am reminded of the memo of the tax officer to a FIRCA board member in response to allegations by a FIRCA consultant who stands accused of not declaring $630,000 in fees: “People who have been caught doing wrong often, in my experience, attack the person who has caught them as a way of distraction from the main issue”.
“If the suspended Chief Justice has been hauled before the inquiry over his tax affairs, why has no action been taken against a serving minister?” the FIRCA sources questioned. Yes, why not?

No comments: