Bus Owners Says They’re Making a Loss But FRCS Says Otherwise
Fiji’s bus industry generates a total revenue of $150 million and pays $2 million for taxes.
The Fiji Revenue and Customs Service CEO, Visvanath Das, said : “As tax records show, some 60 bus companies are operated in Fiji. Of that, they have $150m total industry revenue. If I look at taxes they pay, except charter services, for a $150 million industry, the taxes they pay is about $2 million,” said Visvanath Das- Fiji Revenue and Customs Service CEO.
Das says Government has given the bus owners 5 concessions to decrease their expenses and help the industry grow.
Bus operators don’t pay VAT. If they have vatable expenses, they are allowed to claim a VAT Return.
The imports of bus chassis, E-Ticketing machines and its parts are also duty free.
And for bus operators whose gross turnover is below $1.5 million, they are given duty free on the import of new buses or a 5% decrease on duty for used or reconditioned buses.
“If I looked at that, that reduced duty, we have a duty foregone of approximately $150 000. The incentive is available but owners have to import buses then they don’t pay the duty,” said Das.
Das says there is 0% duty on new chassis fitted with engines or body building purposes, for companies involved in coach work or building.
“In that space, we have a total revenue foregone of $1.5 million from duty not collected by way of policies and concessions. If you look at all these numbers, it is government pumping back into the industry to make it easy for them. In a way, the cost is being reduced for the bus companies,” said Das.
Aside from that, Das says Government has given the industry a fuel concession where bus operators are entitled to claim 2 cents per litre of fuel rebate.
He says Government is helping the bus industry by reducing their cost.
But the Bus Operators Association says the concessions aren’t helpful and they are still making a loss because of the expenses.
Fiji Bus Operators Association President, Richard Lal, said: “The industry’s turnover revenue is $110m per annum. We have expenses too. It’s a gross income [we are concerned about]. And the industry is making a loss at the moment.”
Lal says the the bus owners are not making profit especially after the E-Ticketing system was introduced.
“There is a 10% duty on imported buses. That is an offset against us as we are offering school fare discounts, so it isn’t really a benefit to use but a cost to us,” said Lal.
After the Association met the Bus Fare Review Committee’s Chairman, Joel Abraham, they were told to bring more financial information to support their push for a fare increase.
He added: “Since there is more data required by FCCC, in the meantime we will have to deliberate how the industry will survive. In the interim, we don’t know how long it will take to do the cost adjustment we are wanting.”
In 2009, a review on the bus industry was compiled in what is called an Orion Report which showed that the industry lost $3.5 million a year because of fraud by bus drivers and checkers.
To tackle this issue, the E-Ticketing system was introduced.
In 2011, the Bus Operators Association an signed an MOU, where they will not ask for or be granted a fare increase for the next 3 years, before the E-Ticketing program was launched in 2017.
“The bus industry right now is making a loss and that’s why we are in a desperate situation. If it wasn’t, you wouldn’t find them here [the meeting],” said Lal.
Abraham says the Commission needs to do a trend analysis as the bus owners are saying there is an increase in cost.
“Any changes to the bus fares will affect thousands of Fijian families and in light of incomplete information, we can’t justify a fare increase. We’ve asked the bus owners to go back and give full information. Only upon full information will we proceed. I have no issues in reviewing it. Again, fairness is the keyword. We must maintain fairness, the Fijians have put their faith and trust in FCCC and we will uphold that,” said Abraham.