Deputy Prime Minister and Minister for Finance, Professor Biman Prasad, affirmed that the Government is dedicated to a long-term fiscal strategy, spanning the next decade or two, rather than opting for short-term solutions.
Professor Prasad emphasized that achieving this goal won’t be easy but will be a significant accomplishment for the nation, establishing a solid foundation for reducing the debt-to-GDP ratio over time.
He clarified that this initiative cannot be resolved within just one or two years. Instead, it represents a sustained commitment for the country and future administrations.
“The political resolve and national dedication to managing our debt issues have been praised by international agencies, financial institutions, credit rating agencies, and all our development partners,” he remarked.
“This approval bolsters confidence among investors, including foreign investors, and everyone considering Fiji as a potential investment destination,” he added.
Furthermore, the Deputy Prime Minister warned that Fiji cannot afford to lose $600 million in revenue if the Opposition’s proposal to eliminate the 15 percent VAT is implemented.
“If we reduce VAT from 15 percent to nine percent, we will lose $600 million in revenue. For every one percent reduction in VAT, we lose about $100 million in tax revenues,” he explained.
“Are you going to increase the fiscal deficit to double digits and add $600 million in loans? Technically, you cannot borrow this additional $600 million, given the available financing options,” he said.
Professor Prasad elaborated that the 15 percent VAT rate was not arbitrarily chosen. It was based on a comprehensive analysis and existing financial data.
He also stressed the necessity of adequate funding to ensure the efficient operation of the government.