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Fiji Time: 12:25 AM on Friday 25 July

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NFP: A-G got it wrong

Avinesh Gopal
Thursday, July 03, 2014

THE National Federation Party says Attorney-General Aiyaz Sayed-Khaiyum's rejection of its commitment to reduce Value Added Tax from 15 to 10 per cent if it comes into power is anti-poor.

"It's clear that this government is only concerned about raking as much revenue as possible even if it means squeezing the pockets of the poor," said NFP leader Biman Prasad.

While launching the Prime Minister's Exporter of the Year Award last week, Mr Sayed-Khaiyum spoke about the VAT reduction issue, something that the NFP leader said the party would do if it wins the general election and forms the next government.

Mr Sayed-Khaiyum had questioned how the party would get the income it would lose from the VAT reduction.

But Mr Prasad said: "VAT is a consumption based tax. It means the revenue collected from VAT is dependent upon total consumption."

"So a reduction in VAT from 15 per cent to 10 per cent does not necessarily mean that revenue collection from VAT will decrease by 33 per cent.

"The Attorney-General has got it wrong when he stated that VAT revenue will decrease by 33 per cent if NFP reduces VAT to 10 per cent."

Mr Prasad, an economist, said the government was projected to rake in more than $770million in VAT collection alone this year.

He said the reduction of VAT to 10 per cent would mean the people of Fiji, especially the poor, would save more than $256m.

"The increase in VAT and increase in fiscal duties has seen the cost of basic food items and other necessities increase by 60 per cent in the past seven years.

"It becomes the moral and ethical responsibility of any person aspiring to become a politician as well as any political party to heed the plea for assistance from our citizens." Mr Prasad also invited Mr Sayed-Khaiyum for a public debate on the VAT issue, good governance, transparency and accountability.


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