The Fiji Chamber of SMEs has pushed back on the idea of raising VAT in order to close the debt gap.
According to the president of the Fiji Chamber of SMEs Humphrey Chang, the organisation has refuted a report by the International Monetary Fund stating that Fiji’s largest revenue earning potential could come from increasing value-added tax (VAT) from the current 9 per cent to the world average rate of 16 per cent.
The chamber cites repeated statements by ANZ economists and researchers that Fiji need not worry about its national debt and should instead focus on raising revenue.
“Economists ought to remember that debt is not a bad thing, so long as the funds are rightly used for developmental purposes,” said a statement by the Chamber of SMEs.
“Fiji is being faced by high and still rising cost of living, as claimed by many,” the statement said.
“Surely there must be an alternative road to solving the prevailing debt incurred from the past, through no fault of the current governing regime.”
According to the organisation the answer lies not with raising VAT but with developing Fiji’s industrial hemp industry.
“This one single industry has a high potential of providing more than 12,500 products ranging from biodiesel, construction materials, food chain industry, to clothing, to name a few,” the organisation claims.
“The Coalition Government in power can help solve the high debt through legislating the cultivation and development of this immense industry. For what it’s worth, it is the chamber’s humble opinion that there is no risk taking in the matter.
“Whatever developed country has taken the gigantic step to legislate this multi-billion-dollar industry has intensified their economy, and so can Fiji,” the chamber has urged.
The push towards developing the industrial hemp industry in Fiji has also been part of the chamber’s submission to the upcoming national budget.
