Mahendra Chaudhry, the leader of the Fiji Labour Party, expressed strong opposition to the current 15 percent value-added tax (VAT) during the party’s Annual Delegate Conference held in Nadi. He argued that this tax rate is excessively high and should be reduced to at least 9 percent, the rate that had previously been in effect.
Chaudhry pointed out that even Prime Minister Sitiveni Rabuka acknowledged that the 15 percent VAT is burdensome, although he later conceded to pressures from Finance Minister Biman Prasad and Richard Naidu, the chair of the Fiscal Review Committee. Chaudhry further criticized this decision, suggesting it was motivated by the government’s need to increase revenue amid significant debt, which he claims has adversely affected low-income families.
According to Chaudhry, the increase in VAT has eroded the purchasing power of citizens and negatively impacted business activity. He noted that the associated increase in Social Welfare payouts was minimal, barely providing any relief for low-income workers who now face greater financial strain. As a result, he asserted, these moves have alienated the government from the electorate.
Chaudhry’s comments highlight a significant concern regarding taxation and economic policy’s impact on everyday citizens, especially those from lower income backgrounds. While tax increases are often justified as necessary for fiscal health, they require careful consideration of their broader implications on society.
This situation presents an opportunity for dialogue around fiscal policies that support economic recovery while being sensitive to the needs of the most vulnerable populations. As discussions continue, there is hope that a compromise may be reached that balances government revenue needs with the well-being of the citizens.
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