Students on TELS (Tertiary Education Loan Scheme) were not going to pay off the $613 million they owed Government, says Finance Minister Professor Biman Prasad.

While speaking to Nadi’s business community recently, he said Government would not have been able to collect the full amount from the struggling students.

“The reason we wanted to abolish or take that burden away is because the students are not paying any way,” Prof Prasad said.

“Out of the $613 million or the exact amount that is owed, we are collecting on average about $5m to $7m a year.

“So the revenue lost to Government would be around $5 to $7m a year but the burden on some of the poor students and their parents is huge.

“When we came into Government, we realised that people needed help.

“People were still transitioning from income to jobs after COVID when they lost their jobs and income.

“So we provided $50m and I knew that there were areas that they were not going to be spent or they were going to be wasted and we brought that $50m and gave it to students.”

He said Government wanted to ensure to implement a taxation system that would help every person, especially the poor.

“Our VAT system has been around 15 per cent and below.

“We are looking at all of the options and we feel that the three rates are a big distortion.

“It is not economically efficient and administratively cumbersome so we are looking at what is the best combination.

“We want to weigh it — if we go down the route of having a single rate then we ought to look at how we can help the poor and those who are below the margins of poverty.

“There are about 15 per cent of people that are on the margins of poverty and if we are not careful, we could actually put those people below the margins of poverty or we can put them above it and help them survive.”