Fiji Labour Party leader Mahendra Chaudhry expressed strong disapproval of the current 15 percent value-added tax (VAT), deeming it excessively high. During a recent address at the FLP Annual Delegate Conference in Nadi, Chaudhry advocated for a reduction in VAT to a more manageable rate of 9 percent, similar to historical levels.
Chaudhry argued that maintaining the VAT at 15 percent is unsustainable and recalled that Prime Minister Sitiveni Rabuka had previously acknowledged this rate was too burdensome. However, he claims Rabuka later yielded to pressures from key figures within his administration, particularly Finance Minister Biman Prasad and Richard Naidu, the chair of the Fiscal Review Committee.
The Labour Party leader highlighted concerns over how the increase in VAT disproportionately burdens the poor, labeling it an easy fix for government revenue while ignoring the negative impacts on citizens’ everyday lives. He criticized the government for what he perceives as a betrayal of their electoral promises, noting that the increase has eroded the purchasing power of the populace and stifled business activity.
Chaudhry emphasized that the minor adjustments in social welfare payouts, which increased only by approximately $15 to $20 per month, did not sufficiently compensate for this VAT increase, leaving many struggling financially. Additionally, he expressed that the Coalition government’s actions have further diminished public support.
In summary, Chaudhry’s call for lowering the VAT rate reflects a broader concern for economic justice, particularly for low-income families who are disproportionately affected by increased taxation. A more equitable tax policy could potentially enhance economic activity and improve the living standards for many Fijians.
The ongoing debate surrounding VAT in Fiji underscores the pressing need for policymakers to consider the economic impact of their decisions on the most vulnerable members of society. As discussions advance, there remains hope that constructive dialogue will lead to solutions that prioritize both revenue generation and the welfare of all citizens.
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