Independent MP Premila Kumar has expressed concerns about the uncertainty surrounding the country’s economic growth. Addressing the budget on Monday, she criticized the Government for not making any effort to resolve this issue.
“I have previously warned that any tax hike hurts consumers and businesses alike,” stated Mrs. Kumar. “By reducing purchasing power and investments, we are seeing the negative impact in an already high-cost domestic environment driven by high global prices.”
Mrs. Kumar argued that raising VAT was a misguided decision and that maintaining it was neglectful. “There is a case to reduce VAT to promote consumer confidence and retail sales, and I expected the Minister of Finance to do that.”
She further explained that the anticipated VAT revenue has not materialized, despite higher disposable income from remittances. “When VAT was 9 percent, we collected $1 billion. Raising it to 15 percent only increased collection to $1.3 billion, missing the target by $200 million. This shows the VAT hike has not resulted in a revenue windfall.”
Mrs. Kumar believes that reducing VAT could have restored consumer confidence. “In Opposition and throughout the campaign, this Government made the cost of living a key issue, promising to alleviate it, yet in their first budget, they increased VAT to 15 percent.”
She highlighted that food prices in Fiji remain higher than pre-pandemic levels, putting a constant strain on consumers at the cash registers. “Groceries, utilities, bus fares, fuel, gas, and even basic staples like bread and butter have also seen price hikes. How can we expect our people to thrive under such conditions?”