Opposition MP Jone Usamate has taken a strong stance against former Deputy Prime Minister and leader of the National Federation Party, Professor Biman Prasad, challenging his assertions about tax reforms and their effects on the cost of living for Fijians. Usamate accuses Prasad of misrepresenting the implications of tax changes, particularly in a context where household expenses continue to climb at alarming rates.
Usamate criticizes Prasad’s argument that past tax rates averaged around 25 percent, stating that this figure inaccurately aggregates several levies, including the Value Added Tax (VAT), Environment and Climate Adaptation Levy (ECAL), and Service Turnover Tax (STT), which predominantly affected the tourism and hospitality sectors. He argues that such comparisons do not reflect the current reality facing average citizens, especially with the existing VAT on essential goods and services set at 15 percent.
Additionally, Usamate disputes the government’s claim that no essential food items were exempt from VAT previously. Citing evidence, he mentioned that before the 2022 elections, 21 basic food items—including flour, rice, sugar, and canned fish—did not incur VAT. He also pointed out that vital medications were provided for free to low-income families under the government’s Free Medicine Scheme.
With the government increasing VAT from 9 percent to 15 percent in the 2023 budget, Usamate notes that this decision has contributed significantly to rising living costs. He acknowledges the recent announcement of a VAT reduction to 12.5 percent but highlights that this still represents an increase from the prior rate. Usamate expresses concern that even with this adjustment, households continue to face substantial financial strain due to heightened food and living expenses.
Usamate emphasizes that the public is more concerned with the tangible impact of government policies on their everyday financial situations than with the intricacies of tax computations. His remarks reveal a pressing need for the government to be more transparent and responsive in addressing the economic difficulties that Fijians are encountering.
This ongoing dialogue between the opposition and the government could potentially pave the way for more equitable and clear economic policies, ultimately benefiting all citizens as they navigate the current financial landscape.