Fiji is set to experience significant economic relief starting tomorrow, as key measures from the Government’s Budget take effect. This includes a substantial reduction in Value Added Tax (VAT), a salary increase for civil servants, and a nationwide bus fare subsidy.
The VAT rate will decrease from 15% to 12.5%, resulting in approximately $250 million in tax relief for consumers. This reduction follows the continuation of a zero-rated VAT policy on 22 essential items, such as flour and medicine, bringing the total VAT relief to an impressive $500 million. The move is part of a broader strategy by the government to alleviate the financial burden on households in response to the rising cost of living.
In addition, all government employees will receive a 3% increase in their salaries beginning in August. This is in line with last year’s substantial salary adjustments, which varied from 7% to 20%. According to the Ministry of Finance, this increase will inject a total of $115 million into household incomes, comprised of $85 million from last year and an additional $30 million in the new budget. Civil servants will thus see total salary increases of between 10% and 23% over the course of a year.
Fijians will also benefit from a 10% reduction in bus fares, effective from tomorrow, which will be sustained for the coming year until July 2026. Although the government will charge approximately $10 million for this subsidy, it aims to relieve the cost of transportation for many citizens. For those like 71-year-old Seruwaia Biu and 78-year-old Simione Samu, the bus fare reduction is a welcomed relief, highlighting how even small savings can significantly impact their lives.
These measures have garnered positive sentiments from the community, with many expressing appreciation for the government’s attention to the challenges faced by everyday citizens. The belief is that this budgetary relief will not only ease immediate financial pressures but also contribute to a gradual improvement in living standards across Fiji.
This proactive approach by the Fijian government signals a hopeful direction towards economic stability and resilience as the nation navigates varying global economic conditions.
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