Fiji Labour Party leader Mahendra Chaudhry has expressed strong opposition to the current value-added tax (VAT) rate of 15%, describing it as excessively high. At the annual delegate conference in Nadi, he advocated for a reduction of VAT to at least 9%, the rate that was in effect previously.
Mr. Chaudhry articulated concerns about the unsustainable nature of the 15% VAT, citing that even Prime Minister Sitiveni Rabuka acknowledged its burdensome nature back in May 2023. However, he claimed that pressure from the Finance Minister Biman Prasad, alongside Richard Naidu, chair of the Fiscal Review Committee, led the Prime Minister to retain the higher rate. Mr. Chaudhry criticized this decision as a betrayal of their election promises and argued that the increase was shortsighted, harming the purchasing power of citizens while stifling business activity.
He further noted that the modest increases in social welfare payouts, which were only between $15 to $20 per month, failed to provide adequate support to low-income individuals who are facing the impact of the higher tax. Chaudhry suggested that the approach taken by the Coalition government has alienated them from the public, emphasizing a need for more substantial relief for struggling citizens.
This discussion around VAT indicates a broader concern about economic policies affecting the poor and underlines the importance of sustainable tax solutions that do not burden the most vulnerable populations.
In a hopeful perspective, if the concerns raised are taken into account, it could lead to meaningful dialogue about taxation that prioritizes both government revenue and the economic wellbeing of citizens. This could pave the way for more equitable tax policies that support Fijians in their daily lives.
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