Almost a quarter of the national budget is currently dedicated to servicing government debt, highlighting a critical issue for the country’s financial health. Deputy Prime Minister and Minister of Finance, Prof. Biman Prasad, emphasized the urgent need for improved tax compliance to reduce reliance on borrowing. He pointed out that excessive borrowing detracts from public services, which disproportionately affects the nation’s most vulnerable populations.
Prof. Prasad elaborated on the negative impact of high debt servicing on essential government investments in infrastructure and public services. He stated, “Everyone in this country wants better health, better roads, better water supply, you know, better drainage, better services.” However, he argued that continued borrowing is unsustainable, as it consumes a significant chunk of the budget that could otherwise support vital public services.
The Deputy Prime Minister noted that the poorer segments of the population bear the brunt of underfunded services like healthcare and transportation, while wealthier individuals can protect themselves through private options. He illustrated this further by asking, “If a health center deteriorates or if a school in rural areas isn’t fixed, who gets affected? The most vulnerable.”
In addressing the financial landscape, Prof. Prasad mentioned that Fiji’s personal income tax rates are comparatively low in the region. The government has maintained tax exemptions for incomes below $30,000 to ease the financial strain on citizens recovering from the pandemic, ensuring 30,000 people are exempt from taxation. However, he stressed the importance of enhancing tax compliance to safeguard the future of crucial public services.
Amid global economic pressures that exacerbate living costs, there is hope that bolstered tax compliance can enhance funding for public services, ultimately improving the quality of life for all citizens. A proactive approach toward financial responsibility could provide a pathway to better public services, ensuring that the most vulnerable receive the necessary support they need.
In summary, the government must balance debt management with public service funding to create a sustainable financial future for all citizens.
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