VAT Monitoring System (VMS) | Electronic Fiscal Device (EFD)

Tax Administration (Electronic Fiscal Device) Regulations 2017 Gazette

Tax Administration (Electronic Fiscal Device) Regulations 2017
VAT Monitoring System (VMS) | Electronic Fiscal Device (EFD)  Information Flyer
VAT Monitoring System (VMS) | Electronic Fiscal Device (EFD) FAQs

APPLY FOR EFD ACCREDITATION HERE

Tax Administration (Electronic Fiscal Device) Regulations 2017
The new Law in regards to invoicing method concerning all taxpayers in Fiji has been enacted. Everybody concerned with it should start getting ready. The law is intended to help businesses improve their management, ease administrative procedures and also crack down tax evasion, which will eventually lead to fair competition in all sectors. Taxpayers need to get started now, and avoid the rush when their obligation to comply reaches announced deadline.

1. What is an Electronic Fiscal Device (EFD)?

EFD is an electronic fiscal device system comprising of a Point of Sale system (POS) and Sales Data Controller (SDC) that is connected and produces fiscal invoices. It includes a secure element that transmits the fiscal data to Fiji Revenue & Customs Service (Revenue & Customs) system. The architecture for this system is reflected in the following diagrams:
Option 1 – The POS is connected with a virtual SDC (no external device required) and linked to the Revenue & Customs system.

 

Option 2 –  The POS is connected with an external device (E-SDC) and linked to the Revenue & Customs system.

2. How will the EFD actually work?
Once a sale is made, the POS sends the transaction data to the SDC. The SDC includes a secure element that formats the data into a fiscal invoice, attaches a digital signature and transmits this back to the POS. At this point, the receipt can be printed.

Whilst this process is ongoing, the SDC is also sending fiscal data to the Revenue & Customs system. Taxpayers and customers can log onto the system to verify the receipt information that is being captured. The entire process is very quick and should not affect printing of receipts for customers.

3. How does Revenue & Customs control the EFD?
The EFD is audited by Revenue & Customs using special methods like receipt signature verification, remote audit and copying sales data stored in the E-SDC.

Digital certificates are issued for each EFD and authenticates the EFD when it links to the Revenue & Customs system. It contains the public and private key that will create, produce and verify the digital signature of the EFD. The certificate must be renewed annually for continued operation.

4. Who is required to install an EFD?
The Tax Administration (Electronic Fiscal Device) Regulations 2017 provides the legal framework for implementing EFDs.

Under Regulation 28, the Minister will specify by notice in the Gazette, the group of businesses that are required to implement an EFD and the period of time to become compliant.

For the first phase, the supermarket and pharmacy sectors will be required to implement an EFD. We estimate that it will take between 1 to 3months for sectors to comply. However, phase 1 is given 6 months because this is the first round of implementation process and it will take some time for nominated stakeholders to adjust. At this stage, there is no accredited supplier. Once we have an accredited list, it will become easier to implement other sectors.

Revenue & Customs will continuously meet nominated sectors and interested stakeholders to discuss the rollout as we’d like to ensure a smooth transition. Part of this consultation will include awareness of obligations under the EFD Regulations.

5. What will the nominated sectors need to do to become compliant?
Taxpayers, POS & E-SDC suppliers will need to apply for accreditation. This is similar to the process of accrediting payroll systems which was a requirement when PAYE became a final withholding tax a few years ago. The process of the EFD accreditation is specified in Regulations 8 and 9 and Schedule 3.

Revenue & Customs will publish the protocols for implementation and integration with the Revenue & Customs system. Suppliers and authorized distributors can use this to test and configure their systems.

Once EFDs are accredited, the brand, model and specification details of the POS or ESDC will be published on the Revenue & Customs website (www.frcs.org.fj). Taxpayers who need to become compliant can access this list and choose the product they want.

6. Will this become an added administrative burden for taxpayers?
The administrative burden on taxpayers will eventually reduce as data will be captured electronically and stored in the Revenue & Customs system. Revenue & Customs auditors can access the fiscal data on the system to view sales transactions and related taxes. In addition, VAT returns processing should be more efficiently processed as the fiscal invoices being claimed are available online.

7. What is the estimate cost of an EFD?
This is difficult to estimate as it will depend on a range of factors such as brand, model, upgrade vs new, market presence, etc. Suppliers offering a wide range of products should enable a competitive market and potentially keep costs reasonable. Ongoing operating costs include paper for receipts and communication charges for SIM card or internet connectivity.

If taxpayers already have an invoicing system, they must check with the supplier of their system and verify if the system is compliant. The same accreditation process is applicable. You can always verify if an EFD is compliant by issuing one transaction and scanning the QR code. If the code guides you to the Revenue & Customs verification page, you will be able to verify the transaction.

8. Is there a way to be compliant free of charge?
There will be a Mobile POS provided by Revenue & Customs free of charge. This system can be used with any smartphone or tablet. This is not meant to compete with other suppliers as this type of POS will have some limitations in functionalities but will meet the requirements of the Regulations. Normally taxpayers require additional features to enable wider reporting and accounting of transactions.

9. How will a customer/shopper know the receipt hasn’t being tampered with?
The printed receipt will include a Quick Response (QR) Code. You can scan the code using a QR reader (such as Neo Reader app) on your smartphone. Once the code is scanned, it will open the verification website link and a copy of the receipt will be displayed.

Customers also play an important role in our compliance strategy. Regulation 19 clarifies the role and responsibilities of customers. We encourage customers to ask for receipts. Customers will be able to detect if receipts have been tampered with.

10. What happens if taxpayers don’t comply within the stated period of implementation?
We are working closely with the nominated taxpayers to educate them about the need for compliance. Regulation 28 outlines penalties for failing to implement an EFD before the expiry of the time specified by the Minister for the group of businesses.

What if taxpayer already has an invoicing system?

Electronic Fiscal Devices (ESDs) are designed to suite every business environment. However, if taxpayer already own invoice processing equipment, they must make sure if their system is compatible with new requirements, as soon as possible.

Whatever system taxpayers are using now, they will likely need to be upgraded in order to comply with new rules. From September 2017 the new rules will be made available on the Revenue & Customs website.

The following are upgrade options:
• Taxpayers with up-to-date invoicing systems must check with suppliers of their systems to remain on top of these changes and plans to roll out an upgrade in time to comply with the regulations and new rules.

Some suppliers may drag their feet or even give up on the Fiji market altogether. Taxpayer doesn’t want to be vulnerable to fines and penalties just because a supplier didn’t get around to this upgrade in time. If there’s any doubt that some suppliers will comply with the rules, taxpayers should consider signing with a supplier that can prove its system supports the new rules today, and get in line for the upgrade before the mad rush as the deadline gets closer.

• Taxpayers with an aging invoicing system that is not performing to expectations should consider changing their system. Why not upgrade to a more modern, powerful system that will do more? It’s a good time to learn more about choices since taxpayers will have to upgrade anyway. Every new upgraded system supports inventory control and management reporting. These will pay back with savings on shrinkage and waste alone.

• Taxpayers with no electronic invoicing system should consider getting one. A basic EFD system with one workstation will pay for itself in about six months with faster operations and fewer mistakes. Plus, taxpayers will have peace of mind knowing they comply with the regulations.

How to look for Electronic Fiscal Device (EFD)?

It has proven difficult for the market to get accredited systems on time. For this reason, the Revenue & Customs has eased up on the requirements and decided to roll out implementation in phases.

All EFDs must be certified. This means that it is necessary to have a Point of Sale System (POS) and Sales Data Controller (SDC).

More information about accredited Electronic Fiscal Devices is available at: www.frcs.org.fj

Suppliers of accredited systems shall be published by Revenue & Customs website. Taxpayers must be aware not buy equipment from those who claim to be certified. Instead always look at the source of information. You can always contact our call center on 3243000 for more information.

We appreciate your continued cooperation.

 

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HEAD OFFICE LOCATION

CONTACT DETAILS

Revenue & Customs Service Complex,
Lot 1 Corner of Queen Elizabeth Drive
& Ratu Sukuna Road,
Nasese,
Suva.
Phone: (+679) 3243000
Fax: (+679) 3315537
Email: info@frcs.org.fj