Sugar Minister Charan Jeath Singh has urged the Opposition to cease promoting misleading narratives regarding the recent increase in Value Added Tax (VAT), stating that the changes have not impacted essential goods. His remarks came during a parliamentary session in which he was responding to criticisms from Opposition MPs.
Singh highlighted that while there has been a discussion about VAT, the reality is that 22 key items remain VAT-free. He described the categorization of consumers into three groups based on their grocery spending, explaining that individuals purchasing only basic needs—amounting to around $50—are not affected by VAT as those items are exempt.
He articulated that the higher VAT rate was only applied to luxury goods, arguing, “If you earn $100,000, it’s reasonable that you should bear VAT on non-essential items.” He further accused the Opposition of engaging in “cheap political point-scoring” rather than addressing the facts surrounding VAT increases.
In a related discussion, Independent Member of Parliament Premila Kumar has criticized the VAT increase from 9% to 15%, asserting it has not achieved expected revenue goals and has negatively impacted consumer spending and purchasing power. She noted that the anticipated increase in revenue due to the tax hike has not materialized as projected, revealing that previous collections at the lower rate yielded $1 billion compared to only an additional $300 million gained from the increase.
Kumar’s arguments resonate with the concerns Singh raised, particularly regarding the economic strain on households due to escalating living costs and inflation—which reached 6.7% in June. This reflects a growing call for the government to reconsider its approach to taxation and its implications for ordinary citizens, especially those with limited disposable income.
As discussions around VAT and economic policy continue, Singh remains steadfast in his defense, emphasizing the rationale behind the tax structure as a means to ensure that those who can afford to pay for luxury items contribute appropriately. With the economic landscape under scrutiny, the government’s decisions will likely remain a focal point for debate in the coming months.
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