The Consumer Council of Fiji has called on commercial banks in the country to ensure that specific changes in Resident Interest Withholding Tax (RIWT), announced in the 2018-2019 Budget, is passed on to consumers.
Economy Minister Aiyaz Sayed-Khaiyum had announced that with effect from August 1, 2018, interest income earned on $30,000 or less annually will be exempted from RIWT.
In the 2016-2017 financial year, RIWT was reduced from 20% to 10% but the Council found that banks in Fiji had not passed on the benefit to consumers.
“This mistake caused immense frustration when consumers realised that their interest was still taxed at 20%” a Council notification said.
The blunder was made despite the sophisticated technology and highly trained human resources available in banks.
Banks must update their system and ensure they do not fail consumers this time around.
The Council called on consumers to exercise their rights and be vigilant with monitoring their statements to ensure they are not unfairly taxed.
“We wish to advise consumers that under the new changes, all senior citizens (55 years or above) and pensioners who earn interest income up to $30,000 are eligible to apply for a Certificate of Exemption for RIWT from Fiji Revenue and Custom Services (FRCS) provided this is their only source of income.
Other funds exempted from the RIWT include the first $200 of any bank interest earned in a year and the interest credited to the account of a member of the Fiji National Provident Fund.