Almost 25% of the national budget is directed towards servicing government debt, according to Deputy Prime Minister and Minister of Finance Prof. Biman Prasad. He emphasized the urgent need to improve tax compliance to reduce dependency on borrowing, which he stated hampers public services and affects the nation’s most vulnerable citizens.
Prof. Prasad explained that a significant share of the budget is spent on debt repayments, limiting the government’s capacity to invest in essential infrastructure and public services. He noted that citizens desire improvements in health care, transportation, and other essential services, but continuous borrowing is not a sustainable solution to meet these needs.
He highlighted that low-income individuals are the most adversely affected by inadequate public services, as they rely heavily on government-provided health care and transportation. Conversely, wealthier citizens have the means to access private services, insulating themselves from the repercussions of underfunded public resources.
Prof. Prasad also addressed the country’s tax policies, stating that Fiji has some of the lowest personal income tax rates in the region. To assist citizens during the recovery from the pandemic, the government has maintained tax exemptions for incomes up to $30,000, benefiting around 30,000 individuals.
Despite these measures, Prof. Prasad insisted that enhancing tax compliance is essential to secure the future of crucial public services. He acknowledged the global factors influencing the cost of living, which further complicate the economic landscape.
In summary, while the current financial situation presents significant challenges, there is hope for improvement through enhanced tax compliance and strategic investments in public services. By addressing these issues, the government can work towards a more sustainable and equitable future for all citizens, particularly the most vulnerable segments of society.
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