Fiji Labour Party leader Mahendra Chaudhry expressed strong opposition to the current 15 percent value-added tax (VAT), declaring it excessively high during the FLP Annual Delegate Conference held in Nadi. Chaudhry advocated for a reduction of VAT to 9 percent, arguing that the current rate is unsustainable for the population.
Chaudhry referenced a previous acknowledgment from Prime Minister Sitiveni Rabuka, who, in May 2023, had conceded that the 15 percent VAT was too burdensome. Despite this admission, Chaudhry claimed that the Prime Minister later succumbed to pressure from Finance Minister Biman Prasad and Fiscal Review Committee Chair Richard Naidu to maintain the higher rate. He criticized this move as an effort to increase government revenue and manage the country’s significant debt, despite its detrimental effects on low-income citizens.
“The increase in VAT has diminished the purchasing power of many and stifled business activity,” Chaudhry stated, emphasizing that the small adjustments made to social welfare payments did little to aid those in need, with increases merely ranging from $15 to $20 per month.
In light of these claims, Chaudhry asserted that the challenges imposed by the high tax rate, paired with inadequate relief measures for low-income citizens, have alienated the Coalition from the public they promised to serve.
This discussion about VAT raises important considerations about economic policies and their impact on citizens, particularly in navigating the balance between government revenue needs and the financial burden on the population. As debates continue, it is essential for leaders to keep the interests of the most vulnerable in mind while pursuing fiscal strategies.
Summary: Mahendra Chaudhry, leader of the Fiji Labour Party, criticized the 15 percent VAT as excessively high and unsustainable, urging a reduction to 9 percent. He highlighted the negative impact on low-income citizens and suggested that the government’s approach betrayed their election promises.
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