In recent parliamentary discussions, opposition MP Alvick Maharaj expressed concerns regarding the financial burden that the implementation of a Value Added Tax (VAT) Monitoring System (VMS) would place on small and medium-sized businesses, commonly referred to as “mummy and papa” shops. He highlighted that businesses with an income exceeding $50,000 must register for VAT and install the monitoring system, which can cost between $10,000 and $15,000.
Maharaj argued that many of these small businesses do not generate sufficient profits to afford such expenses, adding that the requirement to hire additional personnel to handle VAT returns exacerbates the financial strain. He criticized the government, specifically targeting the Minister of Finance, for lacking foresight on the implications of this move.
This sentiment resonates with previous criticisms from other opposition voices, such as Premila Kumar, who has taken a stand against the government’s decision to increase VAT from 9% to 15%. Kumar noted that this increase failed to meet revenue targets, undermining consumer purchasing power and worsening the economic climate for many Fijians.
The VAT hike, which was meant to address fiscal challenges and boost government revenue, has instead led to higher living costs and strained small businesses. Kumar’s arguments reflect a broader discontent with the government’s approach to economic management, emphasizing that the sustained high costs of living are a direct consequence of increased taxation without sufficient strategic support for those most affected.
Despite these challenges, there is a growing call for re-evaluation of the VAT policy to better support small businesses and alleviate the financial pressure on the population. This reflects a potential willingness within some segments of the government and opposition to address economic issues constructively, potentially leading to reforms that could foster a more supportive business environment.
The current economic climate presents opportunities for dialogue between government officials and the business community to find balanced solutions. The hope lies in adapting fiscal policies that reduce the burden on small businesses while ensuring the government’s revenue needs are met.
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