The inflationary impact of the now simplified Value Added Tax (VAT) rate is still filtering through to local supermarkets and stores and the hubbub can be confusing to all of us.
We have decided to stick to information provided by the Fiji Revenue and Customs Service (FRCS) as the government agency responsible for VAT and taxes in general.
As stressed by the Minister for Finance Professor Biman Prasad in his interview with The Fiji Times yesterday: “It’s wrong for people to think that VAT has gone up by 15 per cent. As I said, there were three VAT rates – zero, 9 per cent and 15 per cent.
The zero per cent has remained, with the additional now of prescription drugs and medicine to the list of 21 items, so it’s now 22 items.”
FRCS has a complete list of zero-rated items on its website as well as a list of goods and services that have always been 15 per cent VAT rated, meaning, their prices are not affected by the new change.
Among goods that are already 15 per cent VAT rated and whose prices should not change in any significant way are: white goods, alcohol and tobacco, perfume, jewellery, watches, footwear, stereo/sound systems, mobile phones, motor vehicles and air conditioners among others. Services that are also already 15 per cent VAT and should not be affected include hotel services, movies and theatres, bars and nightclubs, bistros and coffee shops, restaurants and others.
See for more information: (https://www.frcs.org.fj/wpcontent/uploads/2022/06/List- on-VAT-ZeroRated-Products-and- 15-VAT-Goods-andServices.pdf).
While prices are expected to increase as goods and services in the 9 per cent bracket are moved up to 15 per cent, they should only increase by as much as 6 per cent. On the list of zero rated VAT are 22 items (previously 21).
It now includes prescription drugs and medicine.
