VAT Exemptions Not Good Enough

The announcement (see below) that the PM has lifted duties and VAT on overseas flood relief donations so long as they are channelled thought Government is not good enough.

Duties and VAT should not be charged on ANY donations, local or overseas, for ANY registered charity, not just a one-off for flood relief. Government  claims VAT was imposed on all donations because some people were abusing the system.  The way out is to register all acceptable charity organizations, and businesses and individuals making donations,   and insist on them submitting an annual account of income and expenditure. This is the practice in NZ and, I understand, in many other countries. If this is still not considered secure enough, duties and VAT could be initially charged and then refunded when the necessary documentation is submitted to Customs and the Tax Department. 
Many donors, including Australia and NZ,  would prefer to target their donations to institutions such as St Johns, and NGOs involved in charity work.  This is the way most aid is targeted to Pacific Island nations so they are not making a special case of Fiji.  Why can't they  target their flood donations in the same way?

Government's failure to eliminate all duties and VAT  will inevitably make the pool of money available for flood relief far less than it would otherwise be.

p.s. To clarify matters, VAT was not introduced by the Bainimarama government, only the VAT on donations.


To facilitate flood relief for Fijians, Prime Minister Voreqe Bainimarama today eliminated duties and VAT on any relief supplies sent from abroad. To qualify, donors will need to channel the relief supplies through the Prime Minister’s Office or the Permanent Secretary for Provincial Development.

For more information, please contact:
 -Permanent Secretary, Prime Minister's Office: 3211273 / (mobile) 9905303, and
 - Permanent Secretary, Provincial Development: 3313400 / (mobile) 9905224


Anonymous said…
Every disaster the PM has his own "dissaster fund" and everytime donors look to channel money other ways - eg red cross, NGOs etc. The reason is simple. Government is a big black hole when it comes to how money is spent. You would never know. Also while many people are happy to support Fiji they don't wish to be seen to be supporting it's military PM and fair enough too.

I will be sending money and goods to people I know and trust. Even if they have to pay VAT on purchasing supplies I know it will do more good than cash in the hands of the military leader.
Inspiring public trust in Flip Flops? said…
It is patently obvious that charging VAT and Duty of any kind on donated goods destined for suffering humanity anywhere in the world is a bad idea. It is economics-gone wrong in that it will have a detrimental effect long past its application date. No one, past, present or future investor will sit idly by and believe that their money is safe when aberrations of this kind take place. We have been handling and advocating for assistance in disasters in Fiji for almost forty years now. No one known to us will wish to contribute anything much other than prayers and sympathy.

While we are about this: does the Police Officer on point duty in Nadi require 'donated' boots? He was directing traffic in flip flops today. His direction of the traffic is appreciated in the panic to buy supplies. But 'flip flops' do not inspire confidence. On the contrary, they serve to show that 'all is not well' with us yet. The Fiji Public requires a climate of trust at this demanding time. Flip Flops on official duties do little to inspire this.
Anonymous said…
as the comparison is always about Qarase, had he done this, he would be accused of pork-barreling and mismanagement, and it would have been the militray that would have been the first to accuse, but again the regime has come up wanting, and those that support it explain it away. What is it going to be this time, Bainimarama was misunderstood ? Where is all the support from his new friends in China, Benin, Azerbaijan with money for boats etc? The problem with two people being 'ministers for everything' (with the omnipotence and infallibility that this implies and is cultivated by the regime), is that at some point you get the blame. Is flooding new to, does it happen so often that you would be incomptetent not to be prepared ...yes. What about frustrating relief supplies with your own actions on the spurious allegation that others had tried to abuse the system (are they in court, charged?) ....and we can go on with the 'baby and bathwater' metaphors.
Anonymous said…
More fascinating insights into a regime that seems to think that all these issues are a complete surpirse...Bainimarama says..."hard and fast decisions have to be made about our infrastructure so we don't get bogged down every time there's heavy rain." Ohhh is that it, it has come as a complete shock and surprise to him that only now he is making this a real concern and priority, anyone would think he just won an election and is looking to blame his predecessor... but hang on, he has been in power for how long??
Where are they? said…
Where are all the junta friends from the north? Why are the friends that 'praise' and 'hail' the Fiji regime not helping with the floods? Have they gone south?
Anonymous said…
Croz, I'm in total agreement with you. VAT should be lifted on donated goods to any on a list of approved charities. 

As you know, channeling donations through the PM's office is a non-starter for many. The PM's Fund doesn't have any of the characteristics of transparency and accountability we rightly expect from charities. To my knowledge, it's never provided a complete list of sponsors or amounts donated or expended, nor has it been audited by an independent accounting firm. 

This naturally gives rise to suspicions that a portion of the donations is being used by Bainimarama as a personal slush fund. I don't know whether they are or aren't, but given the regime's unelected status and previous actions, I can certainly understand, and indeed share, the doubts.  

The PM's use of the donations also has had an aspect of electioneering to it. Perhaps we can take some solace from this indication that Bainimarama might really allow some form of elections this time, but it also dampens enthusiasm by many to contribute to what they interpret to be another self-serving effort.

The regime's payment to Bainimarama of a lump sum pay-out for leave accrued over his entire career, its long silence regarding accusations of multiple paychecks for the Commodore's multiple self-appointed portfolios, and allegations of regime financial improprieties, which, though generally unsubstantiated, are increasingly numerous, do not inspire confidence in the Office of the PM's responsible use of donated funds. Even the Chinese have joined most other donor countries in eschewing the Fund in favor of donations to the Red Cross and other reputable NGOs.

Thank you again for your constructive and very timely comments regarding how Fiji might better access and utilise foreign donations intended to help its people in a moment of dire need.

s/ Dakuwaqa
Walker Texas Ranger said…
The flooding and its consequences appear to be a surprise because most of last year and much of 2010 we were organising Street Parties and converting Namaka-Martintar into a 24hr drinking zone (because this is how Singapore does it?). This was a complete error. It encouraged indiscipline and organised crime and the locals were driving down from Rakiraki to indulge in indiscriminate binge-drinking, drug taking and everything that goes with this. The streets were littered with drunks and there were cases of prostitutes lying in the middle of the road run down. Children were having to pick their way to school at 0700 and take note of all this. What a grim boost to their education! Why were we not building levees along the Nadi River, planting fast growing trees and shrubs to hold the banks, enhancing the river-sited water level gauges (which have all worked we were reliably told yesterday). Yes, the gauges worked but the alarm was not sounded nor given in time to those who needed to know to evacuate. We are our own WORST ENEMY.
Islands in the Stream said…
Accountability for actions does not 'kick in' because others perceive that it should, insist upon it or that there is a general understanding that the use of public money (through taxation) demands it. This is self-evident: it applies regardless of the observer.

When things 'Go Wrong', accountability is imperative. Its past exercise or lack of it, becomes the fundamental crux of evidence. The HOW, the WHY, the WHEN, the WHO?

Above all, mistakes made must be learned from. Risk Management is a fundamental issue for any civilised society. There is no room for personal, petty vendettas, politics-on-the-make, or egos. The sole requirement must and should be: getting the job done and returning people to a measure of normality in their lives. This is professionalism at its best. It is also selflessness in the face of peril.

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