International Journal of Management, Accounting and Economics
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Volume 7, No. 6, June 2020 Pages: 363 - 369
Tax on Forgiven Debts: Fiji Income Tax Act Vs Islamic Perspective
Shivneil Kumar Raj , Mohammed Riaz Azam
Corresponding author:
shivneilr[at]unifiji[dot]ac[dot]fj
Abstract:
An uncollected tax is a debt to the state. In Fiji, individuals’ pay income tax if they earn more than FJD$30,000 under the Income Tax Act 2015 (ITA). Thus, the purpose of this paper is to critically evaluate the stand of debt forgiveness by the lender to the borrower in the Fiji Income Tax Act 2015. Furthermore, the paper has discussed the Islamic viewpoint of debt that is forgiven. The findings indicated that Fiji looks upon the forgiven debts as income in the hand of the borrower and thus is taxed whereas the Islamic view is that such taxes should not be imposed taking into account the verse of the Quran (2:280).
Keywords:
Debt Forgiveness, Tax, Legislation, Income, Gift
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