Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697790324615.pdf (Fiji)
01 AUGUST 2017 - 31 JULY 2018 ANNUAL REPORT Parliamentary Paper No.
260 of 2020 1 FRCS Annual Report 2017-2018 CONTENTS 4 5 6 8 10 10 10 10 11 12 12 13 13 14 15 15 15 17 18 19 19 21 Board of Directors Report from the Chairman Report from the CEO Executive Leadership Team Business Model & Environment: Strategy About us Our Roles Geographical Locations Business Environment & Strategic Objectives Strategic Objectives Functional Areas Risk Analysis And Response Identification of Risk Treatment of Risk Performance Key Performance Indicators Revenue Collection Summary Partnership People Process & Legislation Technology Financial Statements 3 FRCS Annual Report 2017-2018 BOARD OF DIRECTORS Mr. Ajith Kodagoda Board Chairman Mr. Faiz Khan Board Member Mr. Jone Vatukela Board Member Ms. Makereta Konrote Board Member 4 FRCS Annual Report 2017-2018 REPORT FROM THE CHAIRMAN Mr. Ajith Kodagoda Board Chairman Honorable Minister, I am delighted to present the Annual report for the Fiji Revenue & Customs Service for the financial year ending 31 July 2018.
The service continues to grow its revenue collection year on year to support the Fijian Government and Fijian people’s aspirations of growing the Fijian economy.

I can confidently say that the Service is also contributing and spearheading a number of national initiatives which will ensure inclusive socio-economic development as well as transformational strategic thrusts.
All good things take time and I am assured by the strong vision of government outlined in the 20 year National Development Plan, the corresponding FRCS strategic Plans and dedication of the Revenue & Customs Team that we will be ready to respond to the needs of our people today and in the future.

I acknowledge the contribution of fellow Board Directors, the CEO and his leadership team as well as all employees whom without we would not be able to achieve all we have in the last year.
We have come far but know there is still much work to be done and reaffirm that we will endeavor to do our utmost best in all our undertakings.

Ajith Kodagoda Chairman, Board of Directors 5 FRCS Annual Report 2017-2018 Ni sa Bula Vinaka I am delighted to present the 2017 – 2018 annual report for the Fiji Revenue & Customs Service.

As a team we are faring well in relation to the road map we set for ourselves through our 2017 – 2020 Strategic Plan.
However, like any innovative organization we are continuously looking at ways to add value and improve our service delivery.

While we have traditionally been known as an Authority we have made inroads in the last year to re-evaluate our delivery in the market place and have consciously become customer centric in our approach.
There continues to be many lessons learnt in our journey to world class, and managing change has brought unique opportunities for our business operations and our people to rethink and engage in conversations which undeniably can be difficult but nonetheless rewarding in the long run when managed well.
We are continuing on our enterprise to be “A world class revenue service” and on our transformation journey, there continues to be progress made to re- engineer and adopt best practices in our systems and processes.

We are also mindful of the expectations of our stakeholders and government to continue to carry out our roles, particularly the collection of revenue on behalf of government.

Overall, we have collected $2.83b, recording a growth of $252.8m over the last fiscal year.
This is a 9.8% growth compared to the previous twelve months and 8.6% below the forecasted revenue.

CEO REPORT Mr. Visvanath Das Chief Executive Officer 6 FRCS Annual Report 2017-2018 The level of tax debt at the end of the year was $129.9m.
In reflecting on the year gone by I would like to highlight a few key achievements with you that include the following: • Introduction of the Standard Interpretation Guidelines to ensure consistent application of Tax laws and administrative procedures; • Alignment of FRCS staff salaries to market and re-introduction of health insurance for staff; • Commencement of modernization of both Customs and Tax legislations; • Introduction of a pilot Authorized Economic Operator programme; • Design and consultation of a New Tax System; • Roll out of the Electronic Fiscal Device System in phases; • Implementation of an Online Performance Management system; • The successful completion of our two-year role as World Customs Organization Vice Chair Asia Pacific; • IT Risk Management infrastructure set up; I acknowledge the leadership of the Board of Directors, support of Management and all staff in the year’s achievement and look forward to building on this years achievements in the new year ahead.
Visvanath Das CHIEF EXECUTIVE OFFICER 7 FRCS Annual Report 2017-2018 EXECUTIVE LEADERSHIP TEAM Chief Executive Officer Mr. Visvanath Das Director Revenue Mr. Kumar Sami Goundar Director Corporate Services Mr. Fazrul Rahman Director International Relations & Stakeholder Engagement Ms. Fane W. Vave Director Intelligence Compliance & Investigation Mr. Shameem Khan Chief Information Officer Ms. Emily Yalimaiwai Director People, Capability & Culture Ms. Ruth Williams Director Border Mr. Shane Panettiere 8 8 FRCS Annual Report 2017-2018 FRCS Annual Report 2017-2018 9 FRCS Annual Report 2017-2018 9 FRCS Annual Report 2017-2018 BUSINESS MODEL & ENVIRONMENT: STRATEGY About us The Fiji Revenue & Customs Service is a statutory Authority established under the FRCS Act 1999.
The service is governed by a Board of Directors and administered by the Chief Exec- utive Officer.

Our roles: 1.

Collect taxes and duties on behalf of government; 2.

Provide quality advice on tax and customs matter to all our stakeholders; 3.

Facilitate trade and travel; and 4.

Protect the borders.


10 10 FRCS Annual Report 2017-2018 FRCS Annual Report 2017-2018 BUSINESS ENVIRONMENT & STRATEGIC OBJECTIVES INDIVIDUAL WORK PROGRAM BUSINESS UNIT WORK PROGRAM ANNUAL CORPORATE PLAN 2017 – 2021 FRCS STRATEGIC PLAN 2017-2036 FIJI NATIONAL DEVELOPMENT PLAN 11 FRCS Annual Report 2017-2018 11 FRCS Annual Report 2017-2018 Strategic Objectives 1.

People 2.

Partnerships 3.

Process & Legislation 4.
Technology • Implement a people strategy and new structure • Leadership • Framework development : Employment, Recruitment & Selection, Policies & Proce- dure • Career & Rotation Boards & Succession Planning • Promote Voluntarily Compliance • Enhance Gold card services • Maintain effective regional & International Relationships • Develop best practice tools for the South Pacific region • Harmonize Revenue & Customs Administration & Legislation • Enable digital enforcement capabilities • Align with international benchmarking standards • Review policies and procedures • Build Enterprise capability • Manage growth & sustainable projects • Ensure a secure and intelligent information platform • Provide agile & Innovative solutions Functional Areas The Service has seven directorates that represents its distinct functions, which proactively review the identified strategic focus areas of People, Partnership, Legislation & Process and Technology.
The seven functional areas include: Functional Area Responsibilities 1.

Revenue All revenue collection, Customer Enquiry Centers, Taxpayer services, 2.

Intelligence, Compliance & Investigation Revenue risk identification and treatment, Intelligence, Inspection, 3.

Border Maritime, passenger and cargo security 4.

People, Capability & Culture Recruitment, talent acquisition, Staff support services, Career pathing, technical training 5.
Corporate Services Legal, Finance, Administration, Properties, Internal Assurance, Ethical Stan- dards, policy advise & Board Secretary responsibilities 6.

Technology Technology solutions, Project management, Disaster recovery, Information Technology and systems 7. International Relations & Stakeholder Engagement Marketing, Public Relations and International Relations (WCO Vice Chair Asia Pacific role).

This area is now merged into the Corporate Service function.
12 FRCS Annual Report 2017-2018 RISK ANALYSIS AND RESPONSE: The Service has increased its focus and technical efforts to address the growing revenue and security risks.

The introduction of the Risk Analysis and Financial Intelligience (RAFIT) team and increased involvement of Internal Assurance will ensure that risks are identified and treated.
Identification of risk • Combined revenue approach (both tax & customs technical areas) using IMF Tax Administration Diagnostic Assessment Tool (TADAT) , World Customs Organization instruments - Revised Kyoto Convention (RKC) and the Framework of Standards to Secure and Facilitate Global Trade (SAFE framework).

• Using the Compliance Improvement Strategy (CIS) : Segmented approach to addressing key non- compliance areas.

Compliance Areas 1.

Registration 2.

Filing 3.

Payment 4.


Reporting Compliance Risks New & Existing businesses fail to register Failure to file tax returns on time Failure to pay taxes on time Failure to accurately declare income The willingness and behavior of a customer to meet their obligations has a major impact on compliance levels.

In order to achieve the optimal level of compliance, it is necessary to pay attention to customer behavior and the methods of influencing behavior.
This will assist the tax administration in choosing the most efficient (low costs) and effective (best outcome) ways to treat such behaviors.
This is better explained in the OECD Compliance pyramid and behavior model shown below: Business Industry psychological Taxpayer economic sociological High Have decided not to comply Dont want to comply Use full force of the law L e v e l o f c o m Deter by detection p l i a n c e c o s t s Help to comply Create pressure down Attitude to compliance Compliance strategy Make it easy Low Try to, but dont always succeed Willing to do the right thing Source: Revenue Administration, Developing a Taxpayer Compliance Program, 2010 Factors that influence taxpayer behaviour Moreover, according to the objectives of voluntary compliance, it is important to determine the root cause of non- compliance.
The strategies identified in the CIS 2017/2018 has enabled FRCS to better profile, facilitate, identify and guide customers towards voluntary compliance.

13 FRCS Annual Report 2017-2018 Treatment of Risk 1.

FRCS is now using internal and external data to target non-compliance.

Below are some of the tactics we employ: a.


A High Wealth Individual (HWI) database being built, to track those individuals who have accumu- lated net worth to the level that places them at the very top of the wealth scale in a country, and not declaring to FRCS; b.
Data Matching through ASYCUDA World for customs related transactions; c. Extraction of IMF Data online - Access to Macroeconomic & Financial Data Direction of Trade Statistics (DOTS); d. Implementation of SMS platform for new registrants, missing tax returns and payables; e. Analysis of data from 3rd parties such as FEA, LTA, Motor Vehicle companies, Municipal Councils and Insurance Companies.

2.
2.

Risk Development Framework whereby all customers based on their industry and segment type were placed in four different quadrants.

These were high, medium, low risk and key customers.

A brief of each quadrant is discussed below.

RISK DIFFERENTIATION FRAMEWORK SERVICE FOCUS ASSUARANCE FOCUS ENFORCEMENT FOCUS Higher E C N E U Q E S N O C Lower Key taxpayers Higher risk taxpayers Lower risk taxpayers Medium risk taxpayers Less likely LIKELIHOOD More likely 3.
Revised Kyoto Convention (RKC) General Annex which outlines clearance and other customs formali- ties, duties and taxes, security, Customs Control, Application of Information Technology, relationship between the customs and third parties (e.g.)

Customs brokers, Information decisions and rulings sup- plied by the Customs and appeals in customs matters.

4.

SAFE framework of standards to secure and facilitate global trade.
Refers to three pillars which need to be addressed and implemented to secure and facilitate global trade.
14 FRCS Annual Report 2017-2018 Performance: KEY PERFORMANCE INDICATORS Revenue Collection summary Summary Income Tax VAT Trade Others Total 2017-2018 ($) 2016-2017 ($) Growth (%) 749,905,090 788,625,742 668,648,803 623,260,385 697,843,175 702,529,864 607,624,735 569,994,902 2,830,440,020 2,577,992,676 7.5% 12.3% 10.0% 9.3% 9.8% • The service recorded growth in all major revenue streams for the financial year 2017 – 2018 by 9.8% • The revenue accounted for 86.9% of total Government revenue • The growth in revenue was driven by favorable macro-economic conditions, rigorous audits and compliance activities and the efficient recovery of the outstanding revenue and penalties.
For the financial year 2017-2018, we collected a total of $2.83b, recording a growth of 9.8% or $252.8m over the previous financial year.

For the 2017-2018 fiscal year, a positive variance of $12.2m was recorded against the revised forecast based on 10 months of actual revenue baseline.

This represents a 0.43% variance over the revised fore- cast of $2.82b.
The revised forecast stands to be a more objective measure of revenue performance as it takes into account the actual revenue collection trend using 9 to 10 months of revenue data.
Graph 2: Cumulative Revenue Collection vs. Forecast $4,000,000,000.00 $3,000,000,000.00 $2,000,000,000.00 $1,000,000,000.00 $0.0 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 June 18 July 18 Revenue Forecast Cumulative growth has gradually increased over the years with consecutive positive growth from 2010 onwards.

A huge improvement is noted this year with growth rate rebounding to the 2014-2015 levels after a significant dip in 2015-2016 - a period of significant tax cut (VAT).
15 s n o i l l i M FRCS Annual Report 2017-2018 Graph 3: Revenue Collection as at July 2018 2,831 2,578 2,421 2,217 2,015 1,833 1,620 1,475 1,280 1,242 1,219 21.1% 9.8% 13.1% 9.9% 10.0% 9.2% -3.0% -3.0% -1.9% 9.8% 6.5% 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 3,000,000,000 2,250,000,000 1,500,000,000 750,000,000 0 s n o i l l i M The revenue performance is mainly driven through three main channels: • favorable macro-economic conditions; • rigorous audit and compliance activity; and • the efficient recovery of the outstanding revenue and penalties.
Chart 1: Component of Revenue REVENUE PERFORMANCE DRIVERS ECONOMIC CONDITIONS COMPLIANCE DEBT MANAGEMENT $2.50b or 83.3% of total collection $0.19b or 6.9% of total collection $0.14b or 4.9% of total collection The improved economic conditions and intensified compliance efforts by FRCS has contributed to in- creased collections for a number of tax types.

Total compliance collection for the fiscal year amounted to $195.5m.

A total of 2,106 audit cases were finalized by the end of the period.
Total cases currently under audit is 642 and will increase as the taxpayer profiling works have intensified.

Total collections from debt management and arrears amounted to $137.4m.

Tax mix analysis indicates that VAT is leading the revenue collections with a contribution of 27.9% followed by Income tax at 26.5%, Trade taxes at 23.6% and other taxes and levies contributing 22.0%.
The strong growth of 9.8% has culminated into a favorable revenue buoyancy with 1.4% growth in tax revenue relative to a 1% growth in the economy.

16 FRCS Annual Report 2017-2018 Table 1: Tax Mix Analysis Tax Mix 2018 Tax Mix 2017 Growth over Total Forecast Growth /Cum.
Forecast Growth over 2016 % of GDP Revenue Buoyancy -NGDP Income Tax VAT Trade Others TOTAL 26.5% 27.9% 23.6% 22.0% 27.1% 27.3% 23.6% 22.1% 100.0% 100.0% 103.2% 78.3% 89.5% 101.1% 91.4% 3.2% -21.7% -10.5% 1.1% -8.6% 7.5% 12.3% 10.0% 9.3% 9.8% 6.8% 7.2% 6.1% 5.7% 25.8% 1.0:1 1.8:1 1.4:1 1.3:1 1.4:1 Overall Income Tax and Levies led the positive revenue collection.

On the other hand, trade taxes and VAT showed weaker performances.
Given the current revenue variance, various strategies were implemented to ensure minimal gap against the year-end target.

• There is constant monitoring of data transmitted through the Electronic Fiscal Device System.
A total of 23 supermarkets, 31 pharmacies, 81 Legal Firms, 78 Medical Centers, 33 Accounting Firms, 20 Hardware Companies, 7 Travel Agencies, 1 Contracting Company, 1 Transport Company and 2 Construction Companies have the Electronic Fiscal Devices (EFD) installed and their daily transactions are monitored on an hourly basis.

This has also allowed us to estimate the amount of VAT, STT, ECAL collections as well as their compliance rate with the use of EFD’s.
• Higher taxes are anticipated through Government’s expenditure on cyclone assistance relief effort (Homes Care/Farm Care).

A total 60,000 households have been assisted at a cost of $68m and 55,000 farmers have been assisted at a cost of $24.3m.

• The impetus for the following months will also be driven by government expenditure and release of grant payment to the various bodies for undertaking of capital development projects.

As at July, total budget utilization stands at 85.4%.
• The month of June represented financial year end of several companies and this will further contribute to improvement in revenues.

Partnership The financial year saw the Service make a quantum shift in how we approached and communicated with our partners, this was reflected both internally with how we liaised within the organization as well as externally with our customers, clients and suppliers.
The shifts were driven by a conscious effort to maximize the use of technology, increase engagement at strategic levels and increase voluntarily compliance.

Key achievements in this space included 1.

Introduction of CEO Forums with Senior Leaders of the industry to discuss key risks and treatments as well as other emerging issues that the business community needed to be addressed.
The forums enabled the private sector to hear directly from the FRCS CEO on the initiatives of the organization and how it impacts them.

2.

Hosting the Pacific Leadership Program for Border agencies FRCS commenced the Pacific Leadership Program in April 2018.

Participants included Biosecurity Authority of Fiji, Fiji Police Force, Fiji Financial Intelligence Unit, Immigration Fiji and Fiji Revenue and Customs Service staff.

3.
3.

Extension of Memorandum of Understanding and Information sharing - FRCS continues to identify relevant partners for MOU’s that can add value to our deliverables.

17 FRCS Annual Report 2017-2018 In the last financial year this included the signing of 5 new MOU’s with Stakeholders such as Exxon Mobil, Total Fiji, Fiji Bureau of Statistics, Royal Fiji Military Forces and FEXCO.

4. International Relations a.


World Customs Organization Vice Chair Asia Pacific - completion of the two years in the role of Vice Chair for WCO in Asia/Pacific.

This included the organization of the Regional Contact Points Meetings and Regional Heads of Customs Administrations meetings in 2017 and 2018.

The technical assistance and advise provided by Australia Border, Malaysia Customs (previous vice chair) and New Zealand Customs have been invaluable to FRCS’ delivery of the role.
The project planning and monitoring approach have also been a key enabling tool.

b. Pacific Islands Tax Administrators Association (PITAA) Heads Meeting - Fiji hosted the PITAA heads meeting in September 2018.

In the lead up to the event, the FRCS International relations team assisted the PITAA secretariat team in planning the logistics of the meeting using the event project planning approach.
c. Oceanie Customs Organization (OCO) Heads Meeting 2018 was held in Melbourne Australia and Fiji only attended the 1 day closed session in this period, not the main conference.

d. Commonwealth Association of Tax Administrators (CATA) - the annual technical conference of CATA and the General Meeting were held in November 2018 in Denarau.

We have prepared well for the conference to ensure that the first CATA conference to be held in the Oceania region was a success.
e. Korea Customs Service Business Reengineering Project for Customs - This project is an independent assessment of our Customs systems and processes with a view to instill best practices from Korea and other countries.

There has been two exploration missions to Fiji and one study mission by our team to Korea.

We aim to receive a number of recommendations that we will be able to integrate into our current processes.
f. New Zealand Customs - The implementation of the agreed Fiji and NZ country plan for Customs has been ongoing.

Our ability to carry out our role of protecting the border has been greatly assisted by the country plan.

The technical assistance and guidance in the agreed technical areas has seen direct results in terms of detecting illegal and harmful items at our borders.

The assistance also extends to our administrative areas particularly in the area of law modernization.

5.
5.

Trade Facilitation Agreement (TFA) National Steering Group (SG) - The FRCS CEO currently chairs the working groups of the National TFA SG.

He is supported by a core team within the organization that drives the working group meetings and deliverables.

Thus far, a number of outputs have been achieved by the working groups including: Risk Management process mapping of other working group member organizations (Ministry of Health, BAF); ASYCUDA world access and training for the same organizations.
People 1.

Introduction and implementation of an online performance management system was done in August 2018 through running several awareness sessions across the business and having materials and providing a PMS toolkit comprising of booklets and easy guide cards for leaders in order to help them have the conversations around performance and give constructive feedback in order to achieve operational and strategic outcomes.

18 FRCS Annual Report 2017-2018 2.


Insurance cover - we now have insurance cover for outpatient, overseas evacuation and optical and dental which was well received by staff.

There is also a component of life insurance and funeral cover which staffs families were able to access in the event of the untimely passing of a staff member.

Previously these benefits were not available to families of staff members.

3.
3.

Operational Realignments - FRCS has undergone a long awaited reform with focus more around risk assessments and profiling.

4.

Trainings in RTC - Fiji Regional Training Centre hosted 4 WCO workshops which were the WCO Sub- Regional Workshop for Oceanian Members on Combating Counterfeiting and Piracy, WCO People Development Diagnostics Tool Training, WCO Mercator Advisor Accreditation Workshop and the WCO Passenger Control workshop.

5.
5.

Introduction of Customs Cohorts we have since put in a new batch of Customs Cohorts at Nadi Airport and also introduced the new Primary Line Officers to increase efficiency for airports travel facilitation and compliance.

6.

People Capability and Culture Policies & Employment Framework - Awareness on the Code of Conduct and Disciplinary Policy continued.
We have managed to negotiate a Collective Agreement with the Fiji Public Service Association in order to promote interest based bargaining and greater collaboration with our workers who are represented by the workers unions.

We have put in new policies for expecting mothers at work and revising recruitment and leave policies in order to better implement them effectively.

7.
7.

New HR Information System - we are now using a new Payglobal system which includes an online kiosk for leave management and allows managers visibility on their teams to better plan employee leave days and allow faster approvals of leave.

8.

Competency Framework mapping - FRCS has embarked on developing competency frameworks using the Korn Ferry Global Competencies for General Competencies and actually mapping out the customs and tax competencies.

This is expected to be rolled out in full in 2019.


Process & Legislation 1.

FRCS received an Anti-Corruption Policy recognition from Fiji Independent Commission Against Corruption (FICAC) in July 2018, being the first country and organization in the Pacific to receive the policy and recognition.

2.
2.

Development and finalization of Standard Interpretation Guidelines (SIGS) in June 2018 which standardizes operational practice and policies in the relation to the Tax Administration Act (TAA) of 2009 and Customs Concessions as well.

As of close of last financial year 18 SIGS had been published.

3.

Pilot and launch of Fiji’s first Authorized Economic Operator (AEO) on 01 June 2018.
The AEO commenced with the 7 organizations and will be critical as Fiji ascends to ratify the World Trade Organization Trade Facilitation Agreement (TFA) and enhance our efforts to create a safe and secure supply chain.

4.

Modernization of laws.

Technology 1.

The most significant achievement in the technology space for this financial year has been the introduction of the Electronic Fiscal Devise on 01 June 2017 VMS EFD Phased Implementation roll out.
19 FRCS Annual Report 2017-2018 20 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST JULY 2018 24 Members Report 26 Statement by the Members 27 Independent Audit Report 29 Statement of Financial Position 30 Statement of Financial Performance 31 Statement of Changes in Equity 32 Statement of Cash Flows 33 Notes to and Forming Part of the Financial Statements 21 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE MEMBERS REPORT AS AT 31 JULY 2018 In accordance with a resolution of the Service, the members herewith submit the Statement of Financial Position and Statement of Changes in Equity of the Service as at 31 July 2018, and the related Financial Performance and Cash Flows Statements for the year ended 31 July 2018 and report as follows: THE NAMES OF THE MEMBERS OF THE SERVICE IN OFFICE AT THE DATE OF THIS REPORT Mr. Ajith Kodagoda Mr. Jone Vatukela Mr. Faiz Khan Mrs. Makereta Konrote Ms. Fay Yee Mr. Arif Ali Mr. Mahmood Khan Ms. Lala Sowane Ms. Naomi Vuibureta Re-appointed on 31st July 2016 to 31st July 2018 (Chairman) Re-appointed on 29th October 2016 to 29th October 2018 Re-appointed on 22nd September 2016 to 22nd September 2018 Re-appointed on 22nd December 2017 to 22nd December 2020 Appointed on 1st January 2020 to 31st December 2022 (Chairperson) Appointed on 1st January 2020 to 31st December 2022 Appointed on 1st January 2020 to 31st December 2022 Appointed on 1st January 2020 to 31st December 2022 Appointed on 3rd June 2020 to 2nd June 2022 PRINCIPAL ACTIVITIES The principal activities of the Service during the year were to act as the Agent of the State in the provision of taxation and customs services, particularly revenue collection, trade and travel facilitation and border management.
OPERATING RESULTS The net surplus of the Service for the year ended 31 July 2018 was $1,946,205 compared to $9,233,180 for the period ended 31 July 2017.
BAD AND DOUBTFUL DEBTS Prior to the completion of the Service’s financial statements, the members took reasonable steps to ascertain that action had been taken in relation to writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and adequate provisions made for doubtful debts.

For the year ended 31 July 2018, the Service had written off a total of $34,704.78 as bad debts.
The debt was money owed to the Service by previous staff who had left employment without serving the termination service period.

After leaving work these staff were untraceable and as such the debt was deemed uncollectable and was written off after obtaining Board approval.
CURRENT ASSETS Prior to the completion of the financial statements of the Service, the members took reasonable steps to ascertain whether any current assets were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Service.

Where necessary these assets have been written down or adequate provision has been made to bring the values of such assets to an amount that they might be expected to realise.
As at the date of this report, the members are not aware of any circumstances which would render the values attributed to current assets in the Service’s Financial statements misleading.
UNUSUAL TRANSACTION Apart from matters specifically referred to in the financial statements, in the opinion of the members, 22 22 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE MEMBERS REPORT (continued) AS AT 31 JULY 2018 the results of the operations of the Service during the financial year were not substantially affected by any item, transaction or event of a material unusual nature, nor has there arisen between the end of the financial year and the date of this report any item, transaction or event of a material unusual nature likely, in the opinion of the members, to affect substantially the results of the operations of the Service in the current financial year, other than those reflected in the financial statements.
EVENTS SUBSEQUENT TO BALANCE DATE There were no events subsequent to balance date that materially affect the financial statements , except for those already noted in the accounts.
OTHER CIRCUMSTANCES As at the date of this report: a) no charge on the assets of the Service has been given since the end of the financial year to secure the liabilities of any other person; b) contingent liabilities could not be reliably estimated at the end of the financial year which could become liable; and c) can become or are likely to be enforceable within the period of twelve months after the end of the financial year, which in the opinion of the members, will or may substantially affect the ability of the Service to meet its obligations as and when they fall due.
As at the date of this report, the members are not aware of any circumstances that have arisen, not otherwise dealt with in this report or the Service’s financial statements, which would make adherence to the existing method of valuation of assets or liabilities of the Service misleading or inappropriate.
MEMBERS’ BENEFIT Since the end of the previous financial year no member has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments recevied or due and receivable by members) by reason of a contract made by the Service with the member or with a company/ firm which he or she is a partner, or in which he or she has a substantial financial interest.
For and on behalf of the Service : ............................................... Chairman 2nd September 2020 Date 23 23 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE MEMBERS REPORT (continued) AS AT 31 JULY 2018 STATEMENT BY THE MEMBERS In accordance with a resolution of the members of the Fiji Revenue and Customs Service, we state that: In the opinion of the members: (i) the accompanying Statement of Financial Position and Statement of Changes in Equity of the Service are drawn up so as to give a true and fair view of the state of affairs of the Service as at 31 July 2018; (ii) the accompanying Statement of Financial Performance of the Service is drawn up so as to give a true and fair view of the results of the Service for the year ended 31 July 2018; (iii) the accompanying Statement of Cash Flows is drawn up so as to give a true and fair view of the of the cash flows of the Service for the year ended 31 July 2018; (iv) at the date of this statement, there are reasonable grounds to believe that the Service will be able to pay its debts as and when they fall due; and (v) all related party transactions have been adequately recorded in the books of the Service.
Dated at Suva this 2nd day of September 2020.

For and on behalf of the Service and in accordance with a resolution of the members.

.......................................

Member .........................................


Member 2424 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE INDEPENDENT AUDIT REPORT FOR THE YEAR ENDED 31 JULY 2018 OFFICE OF THE AUDITOR-GENERAL Promoting Public Sector Accountability and Sustainability Through Our Audits 6th to 8th Floor, Ratu Sukuna House 2-10 McArthur St P. O.
Box 2214, Government Buildings Suva, Fiji Telephone: (679) 330 9032 Fax: (679) 330 3812 E-mail: info@auditorgeneral.gov.fj Website: www.oag.gov.fj INDEPENDENT AUDITOR'S REPORT FIJI REVENUE AND CUSTOMS SERVICE I have audited the financial statements of Fiji Revenue and Customs Service ("the Service"), which comprise the statement of financial position as at 31 July 2018, statement of financial performance, statement of changes in equity and statement of cash flows for the year then ended, and notes to and forming part of the financial statements, including a summary of significant accounting policies.
In my opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the accompanying financial statements give a true and fair view of the financial position of the Service as at 31 July 2018 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).
Basis for Qualified Audit Opinion The Service, as Agent of the State, administers funds collected on behalf of the Fiji Government and is accountable for transactions involving those funds.

Disclosed in Note 30(b) of the financial statements, under "Agency Transactions Administered for the Government of Fiji", is Government Debtors for Income Tax of $79,264,324, Value Added Tax of $62,733,502 and Customs of $9,018,891.

Detailed Listings were not provided to support these amounts.
Consequently, I was not able to ascertain the accuracy and completeness of the balances disclosed as at 31 July 2018.

I conducted my audit in accordance with International Standards on Auditing (ISA).

My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report.
I am independent of the Service in accordance with the International Ethics Standards Board for Accountant's Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to my audit of the financial statements in Fiji and I have fulfilled other ethical responsibilities in accordance with these requirements and the IESBA Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Emphasis of Matter Note 29 to the financial statements discloses the novel coronavirus (COVID-19) global pandemic impact subsequent to 31 July 2018.

No adjustment has been made to the financial statements as at 31 July 2018 to this effect.
Responsibilities of the Management and Directors for the Financial Statements The management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (IFRSs) and for such internal control as the management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Service's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management intend to cease 25 25 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE INDEPENDENT AUDIT REPORT FOR THE YEAR ENDED 31 JULY 2018 operations, or have no realistic alternative but to do so.
The Directors are responsible for overseeing the Service’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with ISA, I exercise professional judgment and maintain professional skepticism throughout the audit.

I also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• • • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Service’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of the management’s and directors’ use of going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Service’s ability to continue as a going concern.
If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures, are inadequate, to modify my opinion.

My conclusions are based on the audit evidence obtained up to the date of my auditor’s report.

However, future events or conditions may cause the Service to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• I communicate with the management and directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
Ajay Nand AUDITOR-GENERAL Suva, Fiji 10 September 2020 26 26 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 JULY 2018 31 July 2018 31 July 2017 Restated Notes $ $ Total Equity (refer to page 10 ) 82,998,233 81,052,028 CURRENT ASSETS Cash & Cash Equivalent Receivables Inventory Prepayments Investments TOTAL CURRENT ASSETS NON- CURRENT ASSETS Property, plant and equipment Intangibles assets Investments Investment Property TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Creditors and Accruals Provision TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred grant Income 31,337,496 1,997,932 147,516 1,801,662 40,399,887 44,132,251 3,515,129 - 1,309,841 37,862,469 75,684,493 86,819,690 33,530,331 2,520,512 3,275,748 6,725,000 20,472,781 2,571,335 - 6,860,000 46,051,591 29,904,116 121,736,084 116,723,806 3,679,363 718,022 4,272,338 470,144 4,397,385 4,742,482 34,340,466 30,929,296 TOTAL NON-CURRENT LIABILITIES 34,340,466 30,929,296 TOTAL LIABILITIES NET ASSETS 38,737,851 35,671,778 82,998,233 81,052,028 The above Statement of Financial Position has been prepared in accordance with International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
These financial statements are approved in accordance with a resolution of the members of the Service.

Member...........................................

Member ...................................
Date: 2nd September 2020 Date: 2nd September 2020 27 27 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 JULY 2018 31 July 2018 31 July 2017 Restated Notes $ $ REVENUE Grants from Government Fees and charges Recoupment of depreciation through grants Sundry Income Gain on Disposal of Asset TOTAL REVENUE EXPENSES Employee Costs Administrative Expenses Other Operating Expenses Property Expenses Depreciation Amortisation of intangile asset Non operating expenses 15 16 14 (a) and 11 10 22 42,091,985 10,550,737 4,567,278 2,922,880 237,580 42,099,362 11,164,464 1,851,820 2,268,332 19,448 60,370,460 57,403,426 37,502,184 35,042,722 3,012,782 9,586,561 5,812,041 2,438,263 72,424 - 2,703,291 4,505,777 3,648,396 2,189,155 70,984 9,921 TOTAL EXPENSES 58,424,255 48,170,246 NET SURPLUS FOR THE PERIOD 1,946,205 9,233,180 The above Statement of Financial Performance has been prepared in accordance with International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
2828 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2018 Asset Revaluation Reserve $ Retained Earnings $ Total $ Balance as at 01 August 2016 Surplus for the year Balance as at 31 July 2017 Surplus for the period Balance as at 31 July 2018 10,534,061 - 10,534,061 - 10,534,061 61,284,787 9,233,180 70,517,967 1,946,205 72,464,172 71,818,848 9,233,180 81,052,028 1,946,205 82,998,233 The above Statement of Changes In Equity has been prepared in accordance with International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
29 29 FRCS Annual Report 2017-2018 FIJI REVENUE AND CUSTOMS SERVICE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 JULY 2018 Cash flows from operating activities Amount received from government for operat- ing activities Amount received for services provided Payments to suppliers & employees 31 July 2018 31 July 2017 Notes $ $ 42,091,985 42,099,362 11,772,084 (53,488,494) 10,546,467 (46,444,814) Net cash provided by operating activities 375,575 6,201,015 Cash flows from investing activities Payment for Property, Plant & Equipment Capital Grant received from Government Net redemption /(payment )for investment Proceed from sale of fixed assets Interest from investment and other income Income from investment property (19,322,034) 8,433,644 (5,813,166) 289,117 2,933,335 308,774 (5,286,631) 10,901,817 (4,401,375) 23,000 1,053,415 277,787 Net cash provided/(used) in investing activities (13,170,330) 2,568,013 Net increase/(decrease) in cash held Cash as at beginning of the year (12,794,755) 44,132,251 8,769,028 35,363,223 Net cash at the end of the year 23 31,337,4976 44,132,251 The above Statement of Cash Flows has been prepared in accordance with International Financial Reporting Standards (IFRS) and should be read in conjunction with the accompanying notes.
3030 FRCS Annual Report 2017-2018 1.

PRINCIPAL ACTIVITIES The principal activities of the Service during the year were to act as the Agent of the State in the provision of taxation and customs services, particularly revenue collection, trade and travel facilitation and border management.

2.

CHANGE IN NAME Effective from 1st August 2017, the Service's name has changed from Fiji Revenue & Customs Authority to Fiji Revenue & Customs Service.

3.
3.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial statements have been drawn up in accordance with International Financial Reporting Standards (full "IFRS").

The principal accounting policies adopted by the Service are stated to assist in the general understanding of these financial statements.

The accounting policies adopted are consistent with those of the previous year except when stated otherwise.
(a) Issue of Financial Statements The financial statements were approved for issue by the Service's Board of Directors at its meeting held on 22 July 2020.

(b) Basis of Accounting The financial statements have been prepared in accordance with the historical cost conventions, except for investment properties, and the land and buildings that are classified as property, plant and equipment, have been measured at fair value.
The financial statements are presented in the Fijian currency and are rounded off to the nearest dollar, except other- wise indicated.

The Service's financial statement has been prepared on a going concern basis.

However, the Service is dependent on Government policy and the continued funding by Parliment for the administration of the Service.
(c) The Service as the Agent of the State All funds utilised by the Service through various branches to carry out its functions as the agent of the state have been included in the financial statements.

As the Service acts as the Agent of the State, it administers, but does not control, funds collected on behalf of the Fiji Government.

The Service is accountable for transactions involving those resources, but does not have the discretion to deploy the resources for the achievement of its objectives.
Government transactions include taxes and customs duties.

Government revenue is recognised on receipt (cash basis).

(d) Standards, amendments and interpretations issued but not yet effective A number of new standards, amendments and interpretations to existing standards have been published but are not mandatory/ effective for the Service’s 2017/2018 Financial Year.
The Service intends to adopt these standards, amend- ments, annual improvements and interpretations if applicable, when they become effective.

No significant impact is expected to arise out of these standards, amendments and interpretations.
Amendments which are applicable to the Service are : Amendments to IAS 1 – Disclosure Initiative The amendments clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.
Although the amendments do not require specific changes, they clarify a number of presentation issues and highlight that preparers are permitted to tailor the format and presentation of financial statements to their circumstances and the needs of users.

31 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 3.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Standards, amendments and interpretations issued but not yet effective (continued) IFRS 9 - Financial Instruments IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9.

The standard introduces new requirements for classification and measurement, impairment, and hedge accounting.
IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted.

As the Services’s Financial Period starts from 1st August 2017, IFRS 9 was not implemented by the Service.

The adoption of IFRS 9 will not have any material effect on the classification and measurement of the Service’s financial assets and financial liabilities as at reporting date.

IFRS 15 - Revenue from Contracts with Customers IFRS 15 replaces IAS 11 and IAS 18.
IFRS 15 provides a comprehensive framework for recognizing revenues from contracts with customers.

IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, earlier applications is permitted.

As the Service’s financial periods start from 1st August 2017, IFRS 15 was not implemented by the Service.

The adoption of IFRS 15 will not have any material effect on the classification, recognition and measurement of the Service’s revenues as at reporting date.
IFRS 16 - Leases IFRS 16 eliminates the classification by a lessee of leases as either operating or finance.

Instead all leases are treated in a similar way to finance leases in accordance with IAS 17.
Under IFRS 16, leases are recorded on the balance sheet by recognising a liability for the present value of its obligation to make future lease payments with an asset (comprised of the amount of the lease liability plus certain other amounts) either being disclosed separately in the statement of financial position (within right-of-use assets) or together with property, plant and equipment.
The most significant effect of the new requirements will be an increase in recognised lease assets and financial liabilities.

IFRS 16 applies to annual periods commencing on or after 1 January 2019.

Earlier adoption is permitted, but only if IFRS 15 Revenue from Contracts with Customers is also adopted.

The Service is currently assessing the impact of IFRS 16 and plans to adopt the new standard on the required effective date.
(e) Cash and cash equivalents For the purposes of the statement of cash flow, cash equivalents comprise cash on hand and cash at bank (f) Comparative figures Where necessary, comparative figures have been reclassified to facilitate comparison and achieve consistency in disclosure with current year amounts.

(g) Property, Plant and equipment Property, plant and equipment (PPE) are measured at cost less accumulated depreciation and impariment loss except for one class of PPE, which is buildings.
Buildings are measured at revalued amount less accumulated depreciation and impairment loss.

Additions While expenditure on assets with a value of less than $1,000 is generally not capitalised, physical control is maintained over all items regardless of cost.

32 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 3.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (g) Property, Plant and equipment (continued) Depreciation rates Property, plant and equipment (except land) and intangible assets are depreciated at the rates based upon their expect- ed usefull lives using the straight line method: (continued) Buildings Motor Vehicles Office Equipment Detectors and Scanners Furniture & Fittings Computer Hardware Computer Software Disposals Period 20 - 25 years 3 - 5 years 3 - 5 years 5 - 10 years 5 - 10 years 3 - 5 years 3 - 15 years Rate 4 - 5 % 20 - 33% 20 - 33% 10 - 20% 10 - 20% 20 - 33% 5 - 33% Gain and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the statement of financial performance.
Intangible assets Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.

These costs are amortised over their estimated useful lives.

The costs of infinite life are tested for impairment annually and if there is any indication of impairment, necessary amortisation is carried out.

Costs associated with developing or maintaining computer software programmes are recongnised as an expense as incurred.
Costs that are directly associated with the development of identifiable and unique software products controlled by the Service, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets.

(h) Provision for Employee Entitlements Liabilities for salaries and annual leave are recognised, and are measured as the amount unpaid at the reporting date at current pay rates in respect of employees’ services up to that date.
(i) Income Tax The Service is exempt from income tax under section 53 of the Fiji Revenue and Customs Act 1998.

Hence, Income Tax is not separately accounted for in the Service’s financial statements.
33 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) (j) Revenue Recognition Government Operating & Capital Grant Government grants are recognised in the Statement of Financial Performance on an accural basis over the periods necessary to match them with the related costs which the grants are intended to compensate.
The cost of assets funded by grants are capitalized to fixed assets and the corresponding credit is taken as a deferred grant income.

The fixed assets are depreciated over their estimated useful lives.

The benefits arising from the grants being the recoupment through depreciation, is credited to revenue over the period of the useful lives of those assets.

Other income Fees and charges earned is recorded in the Statement of Financial Performance on an accrual basis.
Interest income is recongnised on a time proportionate basis that takes into account the effective yield on the financial assets.

Rental income earned from leasing or sub-leasing properties is recorded in the Statement of Financial Performance on an accrual basis.

(k) Rounding off amounts Amounts in the financial statements have been rounded off to nearest dollar unless specifically stated to be otherwise.
(l) Value Added Tax All items in the financial statements are exlusive of Value Added Tax ( VAT), with the exception of Trade Creditors which are stated as VAT inclusive.

(m) Trades and other payables Trade and other payables are stated at cost.

Trade payables are recongnised in the statement of financial position when the Service has legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.
(n) Held to maturity financial asset Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Service has the positive intention and ability to hold to maturity.

(o) Inventories Inventories are stated at the lower of cost and net realisable value.

Cost is based on the weighted average cost principle and includes expenditure incurred in acquiring the stock and bringing it to its existing condition and location.
Consumables are valued at cost plus the associated delivery charges.

34 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 4.

FINANCIAL RISK MANAGEMENT The Service’s activities may expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk.
The Service’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Service’s financial performance.

(a) Market Risk Interest rate risk The Service has significant interest-bearing assets in the form of short-term/long term cash deposits.

These are at fixed interest rates and hence there are no interest rate risks during the period of investment.
For re-investment of short and long term cash deposits, the Service negotitates an appropriate interest rate with the banks and invests with the bank which offers the highest interest return.

Given the fixed nature of interest rates described above, the Service has a high level of certainty over the impact on cash flows arising from interest income.

Accordingly, the Service does not require simulations to be performed over impact on net profits arising from changes in interest rates.
(b) Credit Risk Credit risk arises from deposits with banks, as well as credit exposure to customers, including outstanding receivables.

For deposits with banks, only reputable parties with known sound financial standing are accepted.

Receivable consist of a small number customers.

The Service does not have any significant credit risk exposure to any single counterparty or any group of counterparties having simliar characteristics.
The carrying amount of financial assets recorded in the financial statements, represents the Service’s maximum exposure to credit risk.

(c) Liquidity Risk Prudent liquidity risk managment implies maintaining sufficient cash to ensure availability of funding.

The Service monitors liquidity through rolling forecasts of the Service’s cash flow position.

Overall, the Service does not see liquidity risk as high given that the Service holds a healthy cash balance.
The table below analyses the Service’s financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance date to the contractual maturity date.

The amounts disclosed in the table are based on the contractual undiscounted cash flows.

Fair value estimation The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values.
The carrying values of financial liabilities and financial assets and provisions are estimated to approximate their fair values.
Financial Assets Investment Receivables Total Financial Liabilities Trade and other payables Provisions Total <1 year ($) 40,399,887 1,997,932 42,397,819 3,679,362 718,022 4,397,384 2 to 5 years ($) 3,275,748 - 3,275,748 - - - Total ($) 43,675,635 1,997,932 45,673,567 3,679,362 718,022 4,397,384 35 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 5.
CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS AND ASSUMPTIONS Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Service makes estimates and assumptions concerning the future.

The resulting accounting estimates will, by definition, seldom equal the related actual results.
The estimates and assumptions that have a significant risk causing a material adjustment to the carrying amounts of assets and liabilites within the next financial year are discussed below.

(a) Impairment of Assets At each reporting date, the Service reviews the carrying amounts of its tangible assets to determine whether those assets have suffered an impairment loss.

If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss.
(b Impairment of Receivables Impairment of receivable balances is assessed at an individual level and impairment tests are performed on a more specific basis.

If any such indication exists, the recoverable amount of the receivable are estimated in order to determine the extent of the impairment loss and are accordingly provided for.

6.
CASH AND CASH EQUIVALENTS Operating Account - ANZ Fees & Charges - HFC Operating Account - CNB Epay- Bred Bank Interest Bearing- Bred Bank Interest Bearing- BOB Petty Cash Debit Card - WBC FRCS E Account -WBC FRCS E Account -HFC Cash and Cash Equivalent 31 July 2018 31 July 2017 $ 2,359,698 18,957,374 1,797,929 283 7,143,698 1,002,097 3,050 44,183 22,387 6,797 $ 20,126,397 21,160,042 2,772,130 (179) - - 2,390 46,274 20,543 4,654 31,337,496 44,132,251 The cash and cash equivalents held by the Service that is not availbale for use include, “Taxpayer funds” for taxpayers that are not contactable of $143,278 which is held in trust in the Operating Account with ANZ.
7.

RECEIVABLES Debtors Deposits Rental Deposits Interest Receivable Business Advance 36 31 July 2018 31 July 2017 $ $ 938,573 130,094 30,000 856,449 300 2,133,304 117,027 26,000 1,212,954 - NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 7.
RECEIVABLES (continued) Staff Salary Advance Less: Doubtful Debts (continued) 31 July 2018 $ 31 July 2017 $ 42,516 1,997,932 - 29,184 3,518,469 - 3,340 Total Receivables 1,997,932 3,515,129 Terms and conditions of the above financial assets: - Debtors are non-interest bearing and are normally received with 30-60 day terms.

- Interest receivable, business and staff salary advance are non-interest bearing with an average term of 60-180 days.
Contingent Assets Contingent Assets 31 July 2018 $ 31 July 2017 $ 7,314 7,314 This relates to general litigation claims made against employees for employment or contractual matters.

These matters are resolved through various means not wholly within the control of the Service and may or may not give rise to a receivable.

8.
8.

INVESTMENT Investments as at balance date comprised of short and long term money placements ranging from three months to two years with interest rates between 3.50% - 4.60% Current Non-Current Total Investments 9.
PROPERTY, PLANT AND EQUIPMENT Carrying amount of : Building Computer Hardware Office Equipment Furniture & Fixtures Land Motor Vehicles Detectors & Scanners Capital Works in Progress Total 37 31 July 2018 $ 31 July 2017 $ 40,399,887 3,275,748 37,862,469 - 43,675,635 37,862,469 31 July 2018 $ 31 July 2017 Restated $ 5,150,211 1,776,673 654,341 1,669,359 4,875,000 1,257,522 403,842 17,743,383 33,530,331 5,345,962 941,384 500,263 2,212,046 4,875,000 914,661 518,397 5,165,068 20,472,781 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 9.
PROPERTY, PLANT AND EQUIPMENT (continued) (a) Reconciliation of Property, Plant and Equipment - 2017/2018 Land at revalued amount Building at revalued amount Computer Hardware at cost Office Equipment at cost Furniture and Fixtures at cost Restated Motor Vehicles at cost Detectors and Scanners at cost Capital Works in Progress Total $ $ $ $ $ $ $ $ $ 4,875,000 6,545,237 4,430,762 6,013,694 8,413,772 2,685,865 828,545 5,165,067 38,957,942 - - - - 6,885 1,249,914 479,902 321,952 775,386 - - - (5,553) (1,172) - - - - - - - (678,432) - - - - - - 16,487,995 19,322,034 - 390 (685,157) - (3,909,679) (3,909,679) 4,875,000 6,552,122 5,675,123 6,492,424 8,735,724 2,782,819 828,545 17,743,383 53,685,138 - - - - 1,199,275 3,489,378 5,513,431 6,201,726 1,771,208 310,148 202,636 412,683 325,824 864,639 382,926 114,555 - (3,611) (1,172) - (628,837) - 1,401,911 3,898,450 5,838,083 7,066,365 1,525,297 424,703 - - - - 18,485,166 2,303,263 (633,620) 20,154,809 4,875,000 5,150,211 1,776,673 654,341 1,669,359 1,257,522 403,842 17,743,383 33,530,331 Cost or valuation Balance at 1 August 2017 Additions Disposals Revaluation gain Transfers Total Accumulated depreciation Balance at 1 August 2017 Depreciation expense Eliminated on disposal of assets Total Carrying amount as at 31 July 2018 38 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 9.
PROPERTY, PLANT AND EQUIPMENT (continued) (b) The Principal Land Valuer, Professional Valuations Limited during July 2016 valued the following properties 1.

Queens Warehouse with Land 2.

Nadi Airport Customs Office 3.

Lautoka Customs Office with Land July 2016 $ November 2010 $ 3,360,000 515,000 6,000,000 593,000 450,000 4,366,000 Total Value 9,875,000 5,409,000 Land and buildings are stated at their revalued amounts as determined by an independent valuer in 2016.
Legal title for land which is valued at $8.5million are yet to be acquired.

These Lands were transferred to the Service under section 16 of the Fiji Revenue and Customs Service Act 1998.

The Service is currently in the negotiation process with the Airports Fiji limited for an offer on the disposal of the Nadi Airport Customs Office, in light of the expansion of the Nadi International Airport.

As at 31 July 2018, no agreement has been reached between the two parties.
The Nadi Airport Customs office building was revalued at $515,000 as at 31 July 2016.

Date of valuation was 22 July 2016.

The valuer used replacement cost approach to value the property.

31 July 2018 $ 31 July 2017 $ 6,802,549 21,600 6,824,149 4,231,213 72,424 4,303,637 2,520,512 6,795,375 7,173 6,802,548 4,160,229 70,984 4,231,213 2,571,335 31 July 2018 $ 31 July 2017 $ 6,995,000 - 6,995,000 6,995,000 - 6,995,000 10.
INTANGIBLE ASSETS Cost-Software Balance as at 31 July 2016 Additions Balance as at 31 July 2017 Accumulated amortisation: Balance as at 31 July 2016 Amortisation for the year Balance as at 31 July 2017 Net Carrying amount 11.

INVESTMENT PROPERTY Investment Property Balance at 1 August Add: Revaluation gain Balance as at 31 July 2017 39 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 11.
INVESTMENT PROPERTY (continued) Accumulated Depreciation Balance at 1 August Add: Depreciation Balance as at 31 July Written Down Value as at 31 July (continued) 31 July 2018 31 July 2017 $ $ 135,000 135,000 270,000 6,725,000 - 135,000 135,000 6,860,000 The Investment Property (Main Customs Building) was revalued by an independent valuer (Professional Valuations Limited) in July 2016.

The valuer used replacement cost approach to value the property.

Date of valuation was on 22nd July 2016.


There is no restriction on the realisability of investment property.

The property is leased under operating lease.

The legal title for the investment property is yet to be acquired by the Service.

12.
12.

Trade and other payables Trade payable VAT payable Others 31 July 2018 $ 31 July 2017 $ 2,309,377 5,591 1,634,395 3,346,641 360,071 565,626 Total Trade and other Payables 3,679,363 4,272,338 Terms and conditions of the above financial liabilities: - Trade payables and VAT payable are non-interest bearing and are settled on 30 day terms - Other payables are non-interest bearing and are settled as and when required.

13.
13.

PROVISION Employee entitlement represents annual leave accrued as at 31 July 2018 31 July 2018 $ 31 July 2017 $ Annual Leave Opening Balance Accrued during the year Utilised during the year 470,144 718,022 (470,144) 245,876 470,144 (245,876) Closing Balance 718,022 470,144 40 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 14.
RECOUPMENT OF DEPRECIATION AND DISPOSAL THROUGH GRANTS 31 July 2018 $ 31 July 2017 Restated $ (continued) Building Written down Value Addition during the year Depreciation recoupment Deferred Grant Computer Hardware & Software Written down Value Addition during the year Disposal Depreciation recoupment Deferred Grant Motor Vehicles Written down Value Addition during the year Disposal Depreciation recoupment Deferred Grant Furniture & Fittings Written down Value Addition during the year Depreciation recoupment Deferred Grant Office Equipment Written down Value Addition during the year Depreciation recoupment Deferred Grant Detectors and Scanners Written down Value Addition during the year Depreciation recoupment Deferred Grant Deferred Grant - Expenses VMS- Depreciation Recoupment NTIS- Depreciation Recoupment Refer to note 25 532,143 - (22,844) 509,299 877,836 1,226,992 (1,942) (393,445) 1,709,441 522,318 775,386 (49,596) (378,471) 869,637 1,836,275 305,783 (813,628) 1,328,430 217,699 386,560 (186,249) 418,010 456,621 - (102,941) 353,680 (849,738) (1,819,962) (2,669,700) 58,846 491,229 (17,932) 532,143 878,074 317,993 - (318,231) 877,836 877,628 199,743 - (555,053) 522,318 2,178,684 406,407 (748,816) 1,836,275 326,548 - (108,849) 217,699 559,560 - (102,939) 456,621 - - - Total Depreciation and Disposal Recoupment 4,567,278 1,851,820 41 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 14.
RECOUPMENT OF DEPRECIATION and DISPOSALS THROUGH GRANTS (continued) Work in Progress Cost Addition during the year Transfers: Nausori Office Transfer : IT and others Transfer : CCTV Nasese Office Transfer : Expenses Transfer : Assess Management Transfers: Help Desk 5,165,068 16,487,995 (334,480) (810,520) (27,556) (2,700,459) (15,065) (21,600) 17,743,383 (continued) 1,605,430 4,606,758 (391,492) (124,853) (491,229) (39,546) - 5,165,068 Details of Commited Capital Grant which are in progress: 31 July 2018 ($) 31 July 2017 ($) Capital Grant for Nadi Office Project Capital Grant for VMS Project Capital Grant for Border Security Capital Grant for IT Projects Capital Grant for Property Projects Capital Grant for NTIS project Total Deferred Grant Income 2,266,048 1,420,891 4,407,758 560,081 - 2,753,808 11,408,586 34,340,467 2,816,513 3,227,982 7,273,436 956,745 780,605 6,266,055 21,321,336 30,929,296 The Service had recevied Generator from the Oceania Customs Organisation as grant and this is presented as deferred income.
15.

GOVERNMENT GRANTS Cash Grants from Government Net Grant received from Government 31 July 2018 ($) 31 July 2017 ($) 42,091,985 42,091,985 42,099,362 42,099,362 Operating Grant for the financial year 2017/2018 was received less of $10.412M from the initial approved Grant of $53.651M (VIP) Government grants received for the purchase of fixed assets are presented as deferred income.
Capital grant of $8.812M VIP was received from Government for 2017/2018 from the initial approved Capital Grant of $11.75M VIP.

16.

FEES AND CHARGES 10,550,737 11,164,464 These are revenue earned from services provided by the Service, which are collected with other revenues and lodged into the Government consolidated fund account.

The Ministry of Economy reimburses these funds to the Service during the year.

17.
17.

SUNDRY INCOME Interest on Investment Income from Investment Property Rental Income Other Revenue Total Sundry Income 42 31 July 2018 ($) 31 July 2017 ($) 2,431,237 303,040 5,734 182,869 2,922,879 1,692,486 303,040 5,505 267,301 2,268,332 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 18.
EMPLOYEE COSTS Salaries and wages FNPF, Overtime, Allowances and Bonuses Annual Leave Training, Professional Development Recruitment, Transfer and Others Total Employee Costs 19.

ADMINISTRATIVE EXPENSES Communications Electricity, Water & Power Supply Travel and Accomodation Contributions to ASMP, WCO & CATA Total Administrative Expenses 20.
OTHER OPERATING EXPENSES Insurance Computer Maintenance/ Software Licenses Stationery & Supplies Vehicle Service & Maintenance Training Levy FCEF Levy Research and Development refer note 25 Consultancy/ Special Projects Professional fees Legal Fees Audit Fees Advertising/ Public Education Books, Periodicals, Publication Uniforms Directors Fees Entertainments Minor Assets Staff Team Building Day Taxi/ Freight Bank Fees and Charges Bad & Doubtful Debts Dog Kennel Expenses Rewards (continued) 31 July 2018 $ 31 July 2017 $ 29,404,272 5,547,410 1,301,899 506,803 741,800 37,502,184 25,957,239 6,414,837 1,159,670 373,075 1,137,901 35,042,722 31 July 2018 $ 31 July 2017 $ 1,058,628 874,935 532,293 546,926 3,012,782 422,871 1,179,933 426,012 211,138 303,415 - 2,669,700 3,357,923 34,776 70,612 21,101 251,714 26,500 69,639 34,500 57,961 261,269 9,120 26,957 58,783 31,364 20,355 40,918 869,773 817,383 546,127 470,008 2,703,291 322,777 948,861 434,495 193,837 258,501 10,224 - 918,758 (8,199) 87,784 32,765 257,564 62,485 253,436 34,500 45,105 129,663 10,000 12,083 65,355 24,395 4,981 406,407 Total Other Operating Expenses 9,588,579 4,505,777 43 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 21.
PROPERTY EXPENSES This includes rents for staff quarters, office space and building maintenance 31 July 2018 31 July 2017 $ $ Office Rent Staff Quarters Office Maintenance 4,921,687 74,358 815,996 2,912,886 137,108 598,402 Total Property Expenses 5,812,041 3,648,396 Rodwell Rd property expenses for the period was $211,337 22.

NON -OPERATING EXPENSES 23.
NOTES TO STATEMENT OF CASH FLOW ReconcilIation of Cash For the purposes of the statement of cash flows, cash includes cash on hand and in banks and excludes short term deposits Operating Account - ANZ Fees and Charges - HFC Operating account - CNB Epay- Bred Bank Interest Bearing- Bred Bank Interest Bearing- BOB Petty Cash Debit Card - WBC FRCS E Account - HFC FRCS E Account -WBC 31 July 2018 31 July 2017 $ $ - 9,921 31 July 2018 31 July 2017 $ 2,359,698 18,957,374 1,797,929 283 7,143,698 1,002,097 3,050 44,183 22,387 6,797 $ 20,126,397 21,160,042 2,772,130 (179) - - 2,390 46,274 4,654 20,543 Cash on hand and in Bank 31,337,496 44,132,251 24.
COMMITMENTS 31 July 2018 31 July 2017 NTIS VAT Monitoring System Supply Chain Queens Warehouse Pebble IT Project Control - FDDU Suva Nadi office Nausori Office Labasa Office Total Commitement Contingent Liabilities $ 24,540,860 506,194 - 116,586 296,212 12,000 204,283 - 21,052 25,697,187 91,648 $ - 697,423 2,840,361 - - - 128,315 169,375 - 3,835,474 89,009 The Service as a statutory body has a number of general litigation claims made against it for employment or contractual matters.
These matters are resolved through various means not wholly within the control of the Service and may or may not give rise to an obligation.

44 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 24.
COMMITMENTS (continued) Operating lease commitments Total commitments for future base lease rentals are as follows: Not later than 1 year Later than I year but not later than 5 years Greater than 5 years Operating lease revenue Non Cancellable operating lease rentals are receivables as follows: Not later than 1 year Later than 1 year but not later than 5 years Greater than 5 years 25.
RESEARCH AND DEVELOPMENT VAT Monitoring System (VMS) (continued) 31 July 2018 31 July 2017 $ $ 2,381,193 1,176,120 - 2,726,538 1,874,396 - 8,256 14,448 - 2,500 - - VAT monitoring system provides efficient and reliable process in combating against fraudulent tax payers and at the same time collects the much needed revenue for the government which was being evaded previsouly.
The VMS has been linked to the company’s cash register, which provides a real time data to FRCS on total company sales and the amount of VAT collected.

FRCS had engaged a supplier for the supply of Sales Data Controller (SDC) for VMS project in 2016.
As work progressed on the proposed solution, further studies,site visits and recommendations from international bodies, new requirements with additional features and controls which provided a better solution, was proposed for successful implementation of VMS project.

Thus the investment in the inital model has been classified as reseach and development cost as through that model a better solution was developed which is suitable for Fijian economy.
Therefore the payment of $ 849,738 has been expensed as research and development cost for the VMS project.

New Tax Information System (NTIS) To improve services to taxpayers, the Service is in the process of upgrading its Tax Information System which is the NTIS project.

Research and scope works were carried out to select the best tax infromation system.

Scope works and vendor selection was successfully completed with the contract signed with the vendor.
The cost related to research and scope works of $1,819,962 is now being expensed as research and development cost for the NTIS project.

26.

PRIOR YEAR ADJUSTMENTS Adjustment of Nasese Fitout Capitalization of $482,194.

The effect of the restatement on the prior years financial statements is summarised below: a.

Effect on Financial Performance Recoupment of Depreciation Through Grants Depreciation b.
Effect on Financial Position Furniture & Fittings Accumulated Depreciation - Furniture & Fittings Deferred Grant Income 45 Reported 2017 Adjusted Restated 2017 ($) ($) ($) 1,803,601 2,140,936 48,219 48,219 1,851,820 2,189,155 7,931,578 5,815,972 482,194 385,755 8,413,772 6,201,726 30,832,857 96,439 30,929,296 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 27.
RELATED PARTIES (a) Transaction with related parties All transaction that ocurred between the Service and companies or organisations in which a member may have an interest, either as a member or employee, were at ‘arms length’ and in normal course of business.
(b) Directors and Key Management Personnel Renumeration Directors’ renumeration-fees Key Managment Personel renumeration for salary and Other benefits 31 July 2018 31 July 2017 $ 34,500 1,347,296 $ 34,500 1,002,754 Directors renumeration include amounts paid to the directors of the Service.

No renumeration is paid to Mr. Ajith Kodagoda.

Remuneration for Ms. Makereta Konorote and Mr. Faiz Khan are paid directly to the Ministry of Economy and Tropik Woods Industries, Ltd, respectively.
Remuneration for Mr Jone Vatukela is paid to him.

Remuneration for Mr Shane Panettiere, Director Border Force is paid by NZ Customs, and is not part of FRCS’s Management remuneration.

Key Management Personnel Key Managment personnel are those persons having authority and responsiblity for planing, directing and controlling the activities of the entity, directly or indirectly (whether executive or otherwise) of that entity.
During the reporting period, the following persons were the executives identified as key management personnel, with the greatest authority and responsibility for the planning, directing and controlling of activities.
Mr. Visvanath Das - Chief Executive Officer Mr. Kumar Sami Goundar - Director Revenue Management Mr. Fazrul Rahman - Director Corporate Services Mrs. Emily Yalimaiwai - Chief Information Offcier Mr. Shameem Khan -Director Intelligence, Compliance & Investigation 17/08/2016 - 31/07/2019 03/10/2016 - 23/11/2017 03/10/2016 - 31/07/2019 01/07/2016 - 31/07/2019 06/03/2017 - 31/07/2020 Mrs. Fane Vave - Director International Relations & Stakeholder Engagement 17/08/2016 - 31/07/2019 Mrs. Ruth Williams - Director People Capibility & Culture Mr. Shane Panettiere - Director Border Force Mr. Krishna Chandra - Deputy Director Fraud & Investigation Mr. Jonetani Vuto - Deputy Director Revenue Management Mr. Muni Ratna - Deputy Director Revenue Management Mr. Winston Rounds - Acting Director Border 13/12/2017 - 31/07/2020 01/01/2017 - 04/07/2018 23/06/2017 - 31/07/2020 23/06/2017 - 31/07/2020 01/04/2017 - 31/07/2019 21/06/2018 - 21/09/2018 46 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 (continued) 28.
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS The registered office and principal place of business of the entity is located at: Fiji Revenue and Customs Service Complex Lot 1 Corner of Queen Elizabeth Drive and Ratu Sukuna Road Nasese Suva, Fiji 29.

EVENTS SUBSEQUENT TO BALANCE DATE COVID-19 had an effect on the grant allocated to Fiji Revenue and Customs Service in the 2019-2020 financial year.
In the COVID-19 Response Budget for the financial year 2019-2020, the total budget allocation for the Service was reduced by $10 m. 30.

AGENCY TRANSACTIONS ADMINISTERED FOR THE GOVERNMENT OF FIJI (a) Government Revenue The Service is responsible for the collection of the following revenues which are deposited directly by the Service into the Government’s Consolidated Fund account of Government.

The Service does not receive these funds in its bank account.

Government revenue is recognised on receipt.
31 July 2018 31 July 2017 Customs Collection Less: Rebates/misc fees & charges Inland Revenue Collection Less: Refunds Value Added Tax Less: Refunds $ 896,616,535 (16,097,405) 880,519,130 1,226,379,930 (65,058,282) 1,161,321,648 1,044,540,671 (255,941,429) 788,599,242 $ 820,441,212 (5,036,688) 815,404,524 1,119,759,558 (59,681,274) 1,060,078,284 942,908,015 (240,398,150) 702,509,865 Total Government Revenue 2,830,440,020 2,577,992,673 (b) Government Assets - Debtors The balance outstanding as at 31 July 2018 of $462,578,150 consisted of arrears as follows: Income Tax Value Added Tax Customs Tertiary Education Loan Scheme (TELS) Total Arrears 31 July 2018 31 July 2017 $ 79,264,324 62,733,502 9,018,891 311,561,433 462,578,150 $ 64,296,411 43,871,687 2,867,933 218,101,454 329,137,485 The above amounts include penalties that may be waived and balances that may be disputed by taxpayers.
For the year ended 31 July 2018, the total amount of $121,793,317 (2017: $48,277,990) in penalties was waived/ written-off by the Service.

The withdrawals were made in accordance with Section 48(7) of Tax Administration Act and Section 34 of the Financial Management Act 2004.

47 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 30.
AGENCY TRANSACTIONS ADMINISTERED FOR THE FIJI GOVERNMENT (continued) (c) Government Liabilities VAT Refunds Outstanding Income Tax Refunds Total Liabilities 31 July 2018 31 July 2017 $ 147,144,674 17,104,592 164,249,266 $ 75,772,512 18,694,678 94,467,190 For the year ended 31 July 2018, a total tax of $368,396,176 was progressively received for the tax year, for which assessments will be raised once the taxpayers tax year ends, which is usually December.
According to Income Tax Act, Taxpayers are given three months to lodge their tax returns after which assessments will be raised and ultimately offset these payments.

Total Income tax refunds for the year 2016/2017 has been restated from $106,865,387 to $18,694,678 to reflect the correct treatment for all refunds.

The reason for the restatement is to exclude taxes recevied progressively during the year.

The $18,694,678 includes only individual income tax refunds as at 31st July 2017.
(d) Government Contingent Liabilities and Contingent Assets The Service as an agent of government currently has a number of litigation claims made against it and also claims against the taxpayers in relation to tax and customs matters.

These matters are resovled through various means not wholly within the controll of the Service and may not give rise to an obligation.
Contingent Liability Contingent Asset 31 July 2018 31 July 2017 $ 35,482,450 13,640,969 $ (Restated) 41,818,802 11,212,893 In 2016/2017 signed Financial Statements, Contingent Liability and Contingent Asset was reported as $47,796,909 and $5,917,956 respectively.

The reason for the restatement in Contingent Assets and Liabilities for 2016/2017 is due to errors amd omissions.
Errors relates to the classification of assets and liabilities whilst Omission relates to criminal cases not included in the listings.
48 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018 Revenue & Customs Service Complex, Lot 1 Corner of Queen Elizabeth Drive & Ratu Sukuna Road,Nasese, Suva Phone: (+679) 3243000 Fax: (+679) 3315537 49 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFIJI REVENUE AND CUSTOMS SERVICEFOR THE YEAR ENDED 31 JULY 2018FRCS Annual Report 2017-2018