The World Bank’s recommendations to fix Fiji’s balance sheet will send thousands of Fijians into poverty, fuel excessive inflation and lead to social disorder, chaos and instability, says Fiji Labour Party leader Mahendra Chaudhry.
He said if adopted, it would bring untold hardship and suffering to at least 70 per cent of the Fijian people.
“The report must be rejected and a more acceptable and realistic solution explored,” Mr Chaudhry said.
He was referring to the World Bank’s Fiji Public Expenditure Review 2023 which recommended the removal of zero-rating of VAT (value added tax) on essential items, increasing VAT up from nine to 15 per cent and reducing the income tax threshold from the current $30,000 to $16,000, among other suggestions.
The report also called for the removal of subsidies to the sugar industry, review of TELS and relook at poverty alleviation payments.
“The impact of the report’s recommendations on the nation as a whole, will be disastrous to say the least.
“It will further accelerate the exodus of skilled workers and professionals to foreign countries.
“The removal of subsidies will lead to the demise of the sugar industry with grave consequences for landowners, cane growers and the rural economy as a whole.
“Increasing the VAT rate to 15 per cent and reinstating it on basic food items while reducing the tax threshold from $30,000 to $16,000 will hit our low and middle income families the hardest.
“Women and children will bear the brunt of this inhumane recommendation.”
Mr Chaudhry said the introduction of new taxes on the manufacturing industry would discourage import substitution and fuel imports causing loss of existing jobs and adding to balance of payments problems.
