Finance Minister Professor Biman Prasad has recently defended the government’s use of VAT revenue and its economic policies amidst rising criticism from Independent MP Alvick Maharaj and former Attorney General Aiyaz Sayed-Khaiyum. They have raised concerns about the rising cost of living, attributing it largely to VAT increases.
In his response, Prasad pointed out that according to the Fiji Bureau of Statistics, inflation was actually negative in April, indicating a decrease in overall prices compared to the previous year. He attributed this positive trend to falling global fuel and food prices, supplemented by domestic policies including the zero-rating of 22 essential items, increased social welfare provisions, and the debt write-off program related to the Tertiary Scholarship and Loans Service.
Additionally, the Finance Minister refuted allegations of misappropriation of VAT funds, insisting that the revenue generated has been crucial in enhancing funding for various sectors, such as health, infrastructure, and income support programs. He clarified that the current VAT structure involves moving certain items from 9% to 15%, while those already taxed at 15% remain unchanged. Furthermore, zero-rated goods continue to carry no VAT, including a recent addition of prescribed medicines.
Addressing concerns about VAT on grocery bills, Prasad argued that the claims surrounding a $500 basket incurring $75 in VAT were misleading. He noted that the actual VAT charge would vary significantly based on what items are included, particularly if zero-rated goods are part of the basket.
Prasad reinforced the overall benefits of these measures, stating that the nation’s debt has already decreased from over 90% to approximately 78% of GDP. His statements aim to emphasize the government’s commitment to transparent economic management, which he believes has bolstered investor confidence and encouraged increased investment in the country.
This ongoing dialogue underscores the government’s challenge of balancing immediate economic concerns with essential long-term strategies. There remains hope that these measures will foster a more stable and prosperous economic landscape for all Fijians in the future.
Leave a comment