Fiscal Committee chair and prominent lawyer, Richard Naidu says the Government had to raise Value Added Tax (VAT) to 15 per cent as it was poorly funded and needed strong revenue policies to meet challenges.
Speaking to FijiLive, Naidu said the Government had no way out and this was one way that Government could be better funded in the next financial year.
Naidu said they have identified priorities areas in the health care sector and the Water Authority of Fiji and there will be new investments into these areas.
He said the Fiscal Review Committee had suggested that the zero-rating be taken away from the selected products and replaced with targeted support for the low income households, which did not come through.
“Clearly the Government has thought about that and decided that the better way to support zero- rated on selected basic good items.”
“Unfortunately, the 15 per cent VAT on everything else is just something that had to happen,” he said.
Also, when questioned on the Government forecast for the next financial year, Naidu hopes the data provided to the Government by the Fiji Revenue and Customs Service is consistent with the data provided to the Fiscal Review Committee during its findings.
“I am hoping that the data is accurate and will work out as projected,” he added.
Government hopes the increase in VAT to 15 per cent will potentially rake in $650 million in revenue.
