TAXMAN & THE IG MINISTER

From: The Fiji Sun 8/15/2007 10:04:51 AM
(http://www.sun.com.fj/)

A minister in the Interim Government failed to lodge tax returns for three years and was later assessed $95,000 tax on undeclared income. The minister paid late lodgement penalties when the tax returns for 2000, 2001, and 2002 were finally delivered in 2003.

The records also show a dramatic increase in bank interest over the four years, indicating cash at bank building to more than $1 million.
All this material that came into my possession before the coup indicates that this particular minister may have evaded tax.

I have had the material examined by forensic accountants who indicated that while the files are entirely typical of tax evasion they do not by themselves prove it.
They said a thorough investigation would be necessary to establish the truth.
My file on the minister's tax affairs has been handed to the Fiji Independent Commission Against Corruption.

My investigation covers income tax records covering a period of ten years.
In 2005, long before the current controversy that is raging over alleged tax evasion claims, I anonymously received a brown envelope whose contents clearly reveal that the Cabinet Minister had not submitted his annual tax returns for nearly three years, raising questions as to why FIRCA allowed him to do so because he was clearly in breach of the tax laws on submission of tax returns.

According to the records, the minister filed 2000, 2001 and 2002 returns together in late 2003 as all the original assessment notices were issued on 17 December 2003. The 2003 return was filed before 4 May, 2004.

FIRCA then issued amended assessments for all four years on 23 December 2004, presumably after audit and investigations. Many of the debit entries of assessments, penalties, and interest were credited (reversed) around or after those dates, as were the payments.

In January I began examining the documents on proving certain conclusions. I collaborated with overseas publications, which submitted the documents to forensic accountants who offered the view that while this kind of behaviour was entirely typical of attempted tax evasion they did not by themselves, prove tax evasion. More investigation was needed on that front.

We however found that the Cabinet minister in question did not submit returns for three years.

The tax records relating to this individual also reveal late payments, penalties, and negotiations to bring down payments, and huge lump sum payments and negotiated settlements over the ten-year period, from 1994 to 2004. The record shows undeclared (omitted) income for each year. The audited ones show that there were penalties on the Minister for late payments. They also show that some of the penalties were, supposedly as a result of negotiation, reversed.It must be pointed out that it is not possible to identify sources of this alleged income from these documents. That can only be identified from the actual returns submitted or as tracked by FIRCA from their own investigations, demands to banks for disclosure etc. The ten years of records show a huge increase in deposits held by the Cabinet minister, which were allegedly undeclared. This keeps increasing each year, according to the records. Assuming salary was the minister's only fixed income, the question is where did the increases in the minister’s bank deposits each year come from? FIRCA would not be interested in the source but only that one received income and he or she must pay taxes on it.

There were two payments made by the minister to FIRCA. The two entries that are most significant are the large payments made in 2004 and 2005. On 10 November, 2004, one payment of $86,069.62, under receipt number 5093831, was made to FIRCA. On 21 June 2005, another payment of $9,684.14, under receipt number 5142483, was made. The total of the two tax amounts paid by the minister and receipted is $95,753.76. These are, according to experienced English tax assessors, very large payments by a mere politician. These are negotiated settlements for undeclared income, which the Cabinet minister could not argue out of with the Fiji taxman. The large number of assessments and charges imposed also show FIRCA "discovering" undeclared income. These two payments, at a top tax rate of 32 per cent in Fiji, represent undeclared income of around $300,000.

In observing investigative journalism guidelines, I had also sent a series of questions to the Cabinet minister concerned for answers or explanations but I am yet to receive a reply. As to Section 4 of the Income Tax Act, while the Act provides confidentiality to the taxpayer, it also requires that the taxpayer honestly declare his or her income. The law also requires that the taxpayer submit returns annually.

WHEN THE SHARKS MEET IN A BLOODY FRENZY

Thakur Ranjit Singh, Auckland, New Zealand

It was an eventful annual convention Fiji Law Society at the posh five stars Sheraton Resort in Nadi, over the weekend of 21-22 July, 2007. Why at such an expensive location?

With poverty rife in Fiji, the legal profession still gets between $250 - $600 per hour. Therefore, this presented a legitimate means to write off a leisurely weekend as business expense. While that is good for those “millionaire lawyers”, this was the reason why miserably paid government lawyers and those in statutory authorities could not attend due to the hefty $1000 registration charge. This was in reply to lament of the top guns of the society on the absence of government lawyers in the convention.

It was indeed an interesting meeting with all guns blazing, and which also can be said to be a bloody affair, with so much bad blood between and amongst those in the legal profession.

Indeed, bloody is the term, because in Fiji, we do not hesitate to liken lawyers to sharks. There is a common joke going around grog bowls, in religious mandalis (groups) and at drinking spots that if you throw a lawyer in shark-infested waters, he/she will not be attacked by the shark. The reason? Professional courtesy, as one shark normally does not attack the other!

What this reveals is that legal profession, in Fiji does not rate very high in image and standing. One would rather have more faith and trust in a real estate agent or a secondhand car salesman, than a lawyer in Fiji. Therefore Fiji Law Society’s (FLS’s) holier than though attitude is questionable.

What we hear is that they will shoot from hips to suspended, debar or censure those members who it deems were giving advice to the military, or are sympathetic with the cleanup process, while ignoring what its own history tells.

Prior to December 5, 2006, they were blind to questionable advice that one of their former debarred and suspended lawyers had been giving to a government, which had more faith in those with checkered past, questionable characters and criminal records than clean, honest people.

Were the big lawyers and their law firms on the payroll of SDL government and were expediently quiet about the wrongs that were going in the country? Could not their cry for potential rape of democracy and other draconian legislations going against the principle of social justice have been of higher decibel rather than meek sighs?

If Fiji Law Society of the past had stronger spine and disciplinary procedures, then they would have ensured that any lawyer found in dereliction of duty to clients, rule of law and justice, abusing its trust and trust fund should be prosecuted and banned for life. They should not be unleashed on the community to further abuse our trust. But their indiscretion allowed such a lawyer to become adviser to Fiji government, posing as its unelected Attorney General. If anything that is responsible for Fiji’s current plight, it is the wanting legal advice to the government and crooked ways these advice were given to release convicted persons, and draft questionable legislation while the essential ones, like Code of Conduct were left waiting.


If Fiji Law Society wishes to redeem itself for spinelessness of its past, then it needs to accept the reality of the situation and assist wherever it can, and not prevent any assistance in rescuing the country from its current situation. It cannot completely absolve itself of errors of omission in letting things slip through to such an extent that we find ourselves in now. Nowhere does a Military Commander give some 18 months notice for a pending take over of the government. Where were then the bigwigs of the Fiji Law Society? If they were so concerned about the country, why did they not advice the regime with wanting and credible legal advice of the right way to proceed to avoid what we have on our hands now? Were they too engrossed in making money from the state and other arms of government? If Fiji Law Society cannot do any good, it should not stop anybody else from doing so either.

Back to Fiji Law Convention at the five stars Sheraton over the weekend and the professional courtesy of the sharks.

Yes, indeed, normally one shark does not attack the other. However things are far from normal in Fiji, especially in and around the legal fraternity, and allegations of divisions within the judiciary and the law society itself. Therefore one shark biting the other could not be avoided.

Two lawyers lashed out at each other during a heated discussion on the role of lawyers in upholding and defending human rights. Lawyer Rajendra Chaudhry labelled a comment by lawyer Imrana Jalal as ‘not true’ when she said that Rajendra Chaudhry was in his nappies when she advocated against the 1987 coup and called on lawyers to uphold rule of law despite whoever was in power. She even accused lawyers of having a confused delirium when it came to defining the meaning of rule of law.

Such dind dong or rather gnawing and biting was to be expected. One happens to be the son of Fiji Labour Party leader and Interim Finance Minister Mahendra Chaudhary while the other happens to be the wife of Sakiusa Tausolia, the sacked Chief Executive Officer of Airports Fiji Limited! Indeed chemistry for an explosion!

The division among the lawyers was quite evident when some lawyers expressed support for Rajendra Chaudhry when he said that lawyers stood by and watched while the ousted SDL led government made decisions that were not right by law.

“Where was the legal fraternity on the issue of good governance, sadly you chose to stand by and watch, we must apply ourselves in what we believe in,” he had said

The former Fiji Law Society president, Graham Leung also came up with guns blazing aimed at his fellow lawyers. He accused them of sleeping while the rule of law had been raped and the judiciary tinkered with.

Perhaps what I wanted to question Leung and others was very sensibly and appropriately expressed by another veteran lawyer Tevita Fa. He accused the lawyers of flouting with the events of December last year and that it had now become “sexy” for lawyers to talk about human rights abuses. Lawyer Fa poked the conscience and questioned the sincerity of lawyers by accusing them of using the expressions of human rights abuses following the takeover as a means to promote themselves. He questioned them where were they when human rights abuses took place before the December takeover.

Prior to December 2006, Fiji had gone through a charade of democracy when the country was dragged into a racial chasm, divisive politics, financial and moral bankruptcy, cronyism and favouratism for the criminal elements responsible for rape of democracy in the past.

Indeed, the cream of Fiji Law Society executives and other senior lawyers with over $500 per hour charge fee have lost all moral rights and justifications to question or pontificate on rule of law when they either gained from or stood silently during the events prior to December 5, 2006, and exposed the ethical bankruptcy of the law body.

Yes, indeed, even sharks cannot have the blood and transfuse it too!

(E-mail: thakurji@xtra.co.nz )

(About the Author: Thakur Ranjit Singh is an Auckland based community worker, human rights activist and commentator and analyst on Fiji issues. The views are his own and not necessarily of this paper)