Social responsibility levy imposed on an individual who is liable for income tax commencing from 1 January, 2012. It is a special contribution to the welfare of the underprivileged in Fiji.
Who is liable to pay the levy?
It applies to resident individuals who have a total chargeable income exceeding $270,000 during the income tax year. If you are a non-resident, SRL applies from the first dollar you earn.
Who is responsible for the collection and payment of the levy?
For those that are solely salary & wage earners, employers will make the SRL calculations, deductions and remittances in the same manner as that of PAYE. Those that earn both employment income and business income [e.g. rental income, taxi income, bank interest] will be required to either inform their employers of their estimated chargeable income for the year and/or make payments directly to FRCA.
The employer shall be liable to calculate the SRL amount payable and make the payment to FRCA. Fiji nationals employed in international organizations, embassies and foreign missions will be required to make their own arrangements for payment if there is no PAYE system in their organisation.
For those that are self-employed, they will be required to estimate their chargeable income similar to the Provisional Tax System and make payments directly to FRCA on a monthly basis.
When does it come into effect?
The levy comes into effect from 1 January, 2012.
How do we calculate the SRL amount payable?
SRL is computed by applying the rate to the chargeable income. The rates are provided in the Table A8 of the Fourth Schedule. The levy ranges from 23% to 29% per annum for resident individuals and from 19% to 29% for non-residents.
The resident individual who expects to earn over FJ$270,000 in 2012 and subsequent years will be required to estimate their chargeable income. If the estimate exceeds FJ$270,000 they must calculate the amount of levy that is due each month and make payments to FRCA.
Employers will be required to make deductions and remittances as well.
However for non-residents the amount of levy that is due each month applies to each and every dollar of an individual’s chargeable income. The rates are provided in the Table B6 of the Fourth Schedule of the Income Tax Act.
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