The Fijian government is implementing significant measures to alleviate the pressure of rising living costs on its citizens. In a recent announcement, Deputy Prime Minister and Finance Minister Professor Biman Prasad revealed that the Value Added Tax (VAT) will decrease from 15% to 12.5% starting August 1. This change is expected to provide $250 million in tax relief, contributing to a total of $500 million, which includes continuing zero-rated VAT on 22 essential items.
This adjustment is part of the government’s broader strategy to tackle economic hardships intensified by external pressures, such as rising global commodity prices. Professor Prasad highlighted that the country is highly dependent on imports for over 60% of its consumer goods, making it particularly vulnerable to international economic fluctuations.
In addition to the VAT reduction, changes to tariffs on various goods are part of the budget measures. For example, the tariff protection for chicken portions will decrease significantly, and fiscal duty on frozen fish is set to drop from 15% to 0%. Fruits and vegetables will continue to attract low tariffs, ensuring affordability for everyday consumers.
The government’s approach also acknowledges the historical context of some domestic manufacturers receiving heavy tariff protection, which they are now ready to review to benefit consumers. This proactive assessment aims to break down barriers that lead to inflated prices in certain industries.
Furthermore, the government is maintaining efforts to support vulnerable populations through financial assistance programs, school subsidies, and social pensions. These initiatives reflect a commitment to economic growth, with Fiji’s growth rate recently revised from 3.4% to 3.8%, suggesting a positive outlook despite ongoing challenges.
Overall, these attempts to reduce taxes and tariffs, while bolstering social welfare, reveal a strategic response to the cost of living crisis in Fiji, aiming to provide relief and improve economic sustainability for its citizens. The government’s ongoing engagement and responsive policies instill hope for addressing both immediate financial pressure and long-term economic stability.
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