PM: 15% too much

people living in poverty, the committee recommended.

This was to ease the debt burden that was imposed by the previous administration.

Mr Rabuka confirmed that he has not made any decision yet on any increase in VAT.

“Those that are recommending it will have to come to me with an explanation on what is the effect of keeping the zero rated items as zero rated or what will be the effect on flat rate of VAT on items,” Mr Rabuka said.

“I think 15 per cent is too high,” he said. Mr Rabuka also encouraged Fijians to consider growing their own food in their backyards.

“I had started VAT back in the days and it came as a flat rate, nothing was zero rated,” he said.

“Everything was taxed, value added tax was slapped on every item traded in Fiji. “Chaudhry’s government took away the VAT on basic food items, what happens when you take away basic food items VAT is you reduce the money coming to the government.”

He added that most food items that were imported were not too healthy to consume.

“The food that is imported has so many things that are added to them, then they become the guilty elements in non-communicable diseases.

“Too many little things that they put into the food causes obesity, high blood pressure, all those things that are bad for us.

“If we go on and produce our own food, organically in our backyard instead of buying flour from overseas, grow your own root crops and vegetables and you will save a lot of money.”

Narube responds

Former Reserve Bank Governor Savenaca Narube has advised the government to moderate its expenses instead of trying to increase revenue.

“We have to look at the total package that they are advocating on, they want to reduce what they call budget deficit so they can bring the borrowing down,” Mr Narube said.

“Their suggestion is to reduce the need to tax more, to get more revenue and expenditure remains the same, the deficit goes down and we borrow less,” he said. “The proposed policy of reinstating VAT on essential food items and increasing the tax to 15 per cent will hit the poor and vulnerable heavily when they are already buckling under the heavy weight of the escalating cost of living. Reimbursing them through higher welfare payment will not be effective.

“I fully understand and agree with the urgent need to reduce the budget deficit so we can start to bring the national debt to a sustainable level. But my question is: Why jump to increasing taxes when we have not exhausted our assessment of other policy options that are less painful to the people?

He said the Government needed to review the large budget allocation to the State-Owned Enterprises (SOEs).

“These enterprises swallow a big chunk of our money, and we must impose safeguards so that they spend them wisely.” “It is inevitable in my view that we swallow some medicine now before we end up at the hospital later.

Mr Narube said the Government should tax the rich rather than the poor.

“The disparity of wealth and income is widening. Government should look at taxes like capital gains, a corporate tax surcharge, and higher duties on luxury items.”