Kumar is ‘incorrect’
Committee sets the record straight on tax recommendations
THE Fiscal Review Committee says Opposition MP Premila Kumar is “incorrect” in suggesting they recommended reductions in personal tax rates for high income earners.
In Parliament last week, Ms Kumar said the committee’s recommendations caused more harm than good to Fiji’s economic recovery where the poor were punished and a selected few were rewarded.
Responding to the statement, committee chairman Richard Naidu said it appeared Ms Kumar had not read the committee’s May 2023 report.
“Ms Kumar suggests that the committee’s recommendations on personal income tax favoured wealthy people at the expense of others,” Mr Naidu said.
“If she read the report, she would see that its recommendations (which included an increase in corporate tax) have the opposite effect.
“The Fiscal Review Committee is appointed by the Government, but is independent of the Government. The Government does not tell the committee what to say and the committee does not tell the Government what to do.”
Mr Naidu said the committee had issued a 159-page report in May last year, in which over 100 recommendations were made on taxation, Government spending, social protection, cost recovery, improving economic growth and better use of Government assets.
He also said Government had accepted some recommendations, rejected some and some, they were told, were still being considered.
“The Fiscal Review Committee did not recommend any reductions in personal income tax on people with high taxable incomes.
“The committee recommended only that the Social Responsibility Tax (SRT) be abolished and replaced with a new personal income tax bracket for individuals with high taxable incomes (mostly salaried executives, sole proprietors, and people in partnerships).
“This would be at the same marginal tax rate and would simplify the tax system without reducing the total tax paid by those individuals.”
Mr Naidu said the committee also noted that both the Fiji Revenue and Customs Service (FRCS) and the International Monetary Fund (IMF) had recommended that the top rates of personal income tax come down.
“In the 2023/2024 National Budget, personal income tax rates on the highest incomes were slightly reduced, but this was not on the recommendation of the committee.
“Ms Kumar is welcome to contact the committee members or the committee secretariat to clarify these matters.”