Opposition MP Jone Usamate has publicly criticized former Deputy Prime Minister and National Federation Party leader, Professor Biman Prasad, for allegedly misleading the public regarding tax changes and the impact on the cost of living. Usamate’s statements come in response to Prasad’s defense of government policies, which he dismissed as relying on “spreadsheet arguments,” while everyday Fijians continue to face escalating household expenses.
In his critiques, Usamate highlighted misrepresentations of tax levels, contending that Prasad’s claims about past tax rates reaching around 25 percent were misleading as they combined different levies, such as the Value Added Tax (VAT), Environment and Climate Adaptation Levy (ECAL), and Service Turnover Tax (STT), which primarily impacted the tourism and hospitality sectors. He stressed that it was inaccurate to compare those historical figures with the current 15 percent VAT on essential goods and services that directly affect ordinary households.
Furthermore, Usamate contested the government’s assertion that no essential food items were zero-rated for VAT under the previous tax structure. He provided evidence that before the 2022 election, 21 basic food items—including flour, rice, sugar, and canned fish—were exempt from VAT. He also noted that certain essential medications were accessible through the government’s Free Medicine Scheme for eligible low-income families.
Usamate remarked on the government’s decision to increase VAT from 9 percent to 15 percent in the 2023 budget, which he believes has significantly exacerbated the cost of living. Although he acknowledged the recent announcement of a reduction in VAT to 12.5 percent, he argued that this still represents an increase compared to the rate prior to 2023. He expressed concerns that even with the VAT reduction, it would not sufficiently alleviate the financial burden faced by households struggling with higher food and living costs.
According to Usamate, the general public remains more focused on how government policies directly affect their daily expenses rather than engaging in discussions about the complexities of tax calculations. His comments reflect a broader concern regarding the government’s role in addressing the economic challenges facing Fijians.
Overall, this ongoing debate underscores the need for transparency and clarity in tax and economic policies to ensure that the needs of all citizens are adequately addressed.