OUR economic growth is uncertain, says Independent MP Premila Kumar.
In her reply to the budget on Monday, she said the Government had made no effort to address the issue.
“I have previously warned that any tax hike hurts consumers and businesses alike,” Mrs Kumar said.
“By reducing purchasing power and investments, we are seeing the negative impact in an already high-cost domestic environment driven by high global prices.”
She said raising VAT was a misguided decision and maintaining it was neglectful.
“There is a case to reduce VAT to promote consumer confidence and retail sales and I expected the Minister of Finance to do that.
“The expected VAT revenue has not materialised, even with higher disposable income from remittances.
“When VAT was 9 per cent, we collected $1billion. Raising it to 15 per cent only increased collection to $1.3billion, missing the target by $200million.
“This shows the VAT hike has not resulted in a revenue windfall.”
Mrs Kumar said reducing VAT could have restored confidence.
“In Opposition and throughout the campaign, this Government made the cost of living a key issue, promising to alleviate it, yet in their first budget, they increased VAT to 15 per cent.
“Food prices in Fiji remained higher than the pre-pandemic level, causing a constant pinch at the cash registers. Groceries, utilities, bus fares, fuel, gas and even basic staples, like bread and butter have also seen price hikes. How can we expect our people to thrive under such conditions?”
