Unity Party leader, Savenaca Narube, is concerned that proposed goods tax increases punishes the people for the sins of the previous government.
The former Governor of the Reserve Bank of Fiji says a proposed policy of reinstating VAT on essential food items and increasing the tax to 15% will hit the poor and vulnerable heavily when they are already buckling under the heavy weight of the escalating cost of living.
He said reimbursing them through higher welfare payment will not be effective.
“I fully understand and agree with the urgent need to reduce the budget deficit so we can start to bring the national debt to a sustainable level. But my question is: Why jump to increasing taxes when we have not exhausted our assessment of other policy options that are less painful to the people?
“In the recent Economic Summit, I strongly advocated that we must begin with the total picture in mind and not dive into increasing taxes first. In my view, our first step is to reform expenses. We must not only pick at the obvious culprits like vehicles but have a thorough and systematic review of the entire expenditures of all the ministries. In this manner, we can be sure that any increase in taxes would be spent on the right areas.”
Narube has urged the Government to review the large budget allocation to the State-Owned Enterprises (SOEs). “These enterprises swallow a big chunk of our money, and we must impose safeguards that they spend them wisely,” he stressed.
“It is inevitable in my view that we swallow some medicine now before we end up at the hospital later. But I would urge the Government to tax the rich rather than the poor. The disparity of wealth and income is widening. Government should look at taxes like capital gains, a corporate tax surcharge, and higher duties on luxury items,” he added.
