REPORT 2013

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14 FRCA SIX MONTHS REPORT 2013 A taxpayer completes registration forms for TIN. person has “unexplained wealth” if the value of the person’s total wealth is greater than the value of the person’s lawfully acquired wealth. The value of the person’s total wealth is the total value of properties, including services, advantages and benefits that together constitute the person’s wealth. FRCA and relevant authorities now have additional powers to forfeit any undeclared income as “unexplained wealth”. The new “unexplained wealth” provisions are now in effect and law enforcement agencies are considering a number of cases that will be investigated. The mechanism is now in place for members of the public and businesses to report suspected cases of unexplained wealth to the FIU, FRCA or the Police. Informants will be subject to anonymity and strict confidentiality of information will be also maintained. Lodgment Enforcement, Data Cleansing and Amendments and Correspondence Control The Lodgment Enforcement Unit [LEU] follows up on the lodgment of outstanding returns for VAT, PAYE, Income Tax, and the like. As at 30 June 2013, LEU issued 30,469 demand notices which records a 93% increase compared to the same period in 2012. On the revenue impact, this has resulted in tax revenue of $25,781,512.73 representing a 215% increase in comparison to the revenue result of $8,176,368.79 achieved for the same period last year. This is a remarkable achievement and improvement from the Lodgment Enforcement Unit given the same level of resource allocation as in 2012. Data Cleansing Unit The Data Cleansing Unit is tasked to enhance data integrity by constant updating of taxpayer records to most current taxpayer information. A major project undertaken by the team in the second quarter was data cleansing for FRCA/FNPF ID Card. It took 3 weeks for 6 dedicated Tax Officers to update 250,000 taxpayer records in preparation for timely launching of the Joint ID Card by July 8th. is tasked with timely resolution of amendment requests and objections to notices of assessment when substantiated with necessary documentary evidences. As at end of June 2013 a total of 2,569 amendments and objections requests with assessment value of $4,617,998.00 have been processed. FRCA Balanced Scorecard 2013 The FRCA Board has approved the CEO Balance Score Card for 2013. General Managers and National Managers are now tasked to ensure that all line staff are fully aware of the 2013 CEO Balance Score Card, together with the respective General Manager and Unit Score Cards and the operational framework for these. The CEO has encouraged all staff to have a “Can Do Attitude” which will ultimately drive and mould a “winning” Team FRCA that will deliver our Vision. Internal Assurance Internal Audit Internal Audit supports the Authority by focusing its efforts on audits with a business improvement, consulting or strategic focus, to ensure the alignment of business activities with the department’s strategic direction The routine audit coverage is slightly behind however the Internal Audit unti aims to update its required routine audit by the end of 2013. Internal auditors redeployed resources for the setup of the newly established Staff Tax Audit Unit. In addition to the routine audit the Internal Audit Unit has been assigned to attend to a number of committees e.g FRCA Tender committee e.t.c. This is to provide independence and good governance advice to the FRCA Tender process. Within the past 6 months the Chief Internal Auditor had attended one overseas workshop on Fraud Risk Management. Progress on FRCA Routine Internal Audit 2013: Amendments and Correspondence Control Unit The Amendments and Correspondence Control Unit [ACCU]
15 Description Quarter 1 2012 Corporate Division Quarter 2 2010 & 2011 Taxation Division Quarter 3 2011 & 2012 West Audit Quarter 4 2011 & 2012 Customs Division Audit Management Committee Office of the Audit General Report Special Audit Request Remarks Field audit completed and the report has been presented to the Audit Board meeting Field audit completed and the report has been presented to the Audit Board meeting Field audit completed and the report has been forwarded to Executives for Management Comments. Field audit completed and the report due to be finalized and this will be presented in the next Audit Board meeting. Internal Audit continuously conduct follow up on material audit issues and when required provide consultant advice for Executive Management’s consideration Facilitate OAG personnel during their field audit and consolidate Authority’s comments on audit issues raised. Upon specific request of CEO’s office Internal Audit Unit also assist ESU in conducting preliminary investigation. Additionally the Internal Audit is also working with Stamp Duty in the setup of untapped revenue streams. Staff Tax Audit Update The staff Tax Audit is a sanctioned special task required by the FRCA Board with the objective of ensuring voluntary tax compliance of all FRCA Staff. There are two senior Internal Auditors within the existing team redeployed to conduct the required staff tax Audit. Staff Tax Audit Policy was developed and endorsed by the Audit Board Committee. The Policy provide administrative guideline and delegations of authority under the Income Tax Act for the conduct of Tax Audit by IAS staff. FRCA staff in the conduct of Staff Tax audit are treated similarly to a normal Taxpayer and therefore have the same rights under the Income Tax Act. The team has conducted third party searches necessary for staff Tax audit and challenged to complete tax audit of all executives before end of the year. The vacant positions for Senior Internal Auditors are currently being filled. The new Senior Internal Auditors are expected to add significant value to the Authority in consideration of their knowledge and experience. Ethical Standards Unit (ESU) The Ethical Standards Unit performs the following functions for the Authority: • Develops and implements an ethical code of conduct in compliance with the FRCA Conduct & Discipline Regulations 2002. • Identify and investigate corrupt activities within the Authority. • Respond to complaints registered against employees for non-compliance with the Code of Conduct. • Conduct special investigations required by the office of CEO and the Board. • Unit also carried out other duties as assigned by the CEO such as working closely with Fiji Police Force, FICAC to assist them in investigation, Money laundering cases, criminal cases and other fraudulent and illegal activity. By June 2013 a total of 60 new cases were opened and 5 pending cases from 2012 were investigated for offences related to breach of FRCA Conduct and Discipline regulations and other matters referred from CEO’s office. A total of 24 more cases were registered and investigated in the period January to June in 2013 compared to same period in 2012. Of the total of 60 cases, 2 cases were handled by Fiji Police Force after internal investigations, 4 cases were referred to Tax audit and one file to Customs investigation Branch. A total of 16 case files were closed after investigation was completed. A total of 6 officers were terminated from the service in the first half of this year. The ESU unit also assists other Divisions in FRCA via value adding and capacity building for Customs & Tax related investigations matters. ESU also finalized some of the revenue leakages cases from 2012 in the first half of the year and collected penalty sum of $126,000.00 and amendment fee amounting to $32385.90. Risk Management The Risk Management Unit facilitates the administration of risk management activities in the authority. The unit assists various sections in identifying new risk and continuously monitors the progress of the implementation of approved risk treatments. This is done through the half yearly review for Suva office and annual review for outer ports. Additionally, the unit is actively involved in other value adding activities such as the Business Continuity Plan project and Service Excellence Award Evaluation. Tabulated below are summaries of work covered by Risk Management Unit: Description Risk Register Review Risk Management Steering Committee Meeting Risk Training Business Continuity Plan – Project Remarks Review for Suva Customs and Taxation is completed. Divisional meetings with relevant executive management are yet to be organized to discuss risk treatments. Currently reviewing corporate risk register. 2 meetings convened so far to update FRCA Executive management on the Risk management Progress and way forward. The Risk Management unit together with training section organized Enterprise Risk Management training for FRCA staff. This training was conducted by Mr. Rusco Bavon from FNU in February 2013. Senior Risk Officer is the secretariat for the BCP committee. A draft BCP document has been compiled by NMIA and circulated to the BCP committee members for comments. BCP document to be finalized by end of August 2013.
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Page 3 and 4: 3 ORGANIZATION STRUCTURE BOARD OF D
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Page 13: 13 Critical Success Factor: Interna
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Page 19 and 20: 19 Human Resources Review Workshop
Page 21 and 22: 21 The operating grant was higher b
Page 23 and 24: 23 STATEMENT OF FINANCIAL POSITION
Page 25 and 26: ctors nt, by all gement, CUSTOMER S
Page 27: 27 Fiji Revenue & Customs Authority

REPORT 2013

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