In a recent interview, Lautoka IT professional Mohammed Nafeez emphasized the urgent need for Fiji to undertake bold reforms rather than merely imitating other countries. He argued that the current tax system is excessively burdensome on ordinary Fijians, particularly in light of the rising cost of living and stagnating wages. Mr. Nafeez pointed out that the government’s discourse around economic recovery must begin at the grassroots-level, focusing on the ability of families to afford basic necessities without being driven into poverty by taxation.
Nafeez proposed a restructured tax regime that would involve collecting revenue only once at the point of income generation. He suggested that various professions, including farmers and small business owners, should be allowed to pay a fair income tax and freely spend their earnings without facing additional taxes that deplete their purchasing power. He added that simplifying the tax process could lead to several benefits, including increased consumer spending, support for small businesses, reduced inflationary pressures, and greater encouragement for savings and investments.
The necessity for tax reform is echoed by the recent establishment of a Tax Compliance Task Force, launched by Deputy Prime Minister and Finance Minister Prof. Biman Prasad. This task force aims to combat tax evasion and ensure that all citizens meet their tax obligations, while also shedding light on the hidden aspects of the underground economy. The task force represents a commitment to fostering a fair economic environment and could further support the calls for a simplified tax system as highlighted by Nafeez.
Former Prime Minister Mahendra Chaudhry has also highlighted the challenges created by the current Value Added Tax (VAT) rate of 15%, proposing a reduction back to 9% as a necessary step to relieve the financial pressure on citizens. The significant inflation rate currently at 7.1% underscores the urgency of such reforms, reflecting the growing discontent with existing tax policies.
Overall, the discussions around tax reforms in Fiji reflect a collective call for action to enhance economic resilience and ensure fair treatment for all citizens. By considering these essential adjustments, there is hope for a more transparent and equitable economic landscape that can better support the needs of Fijians.
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