National Federation Party - Fiji
Duty reduction or elimination will not improve lives of ordinary citizens and unemployed
Monday 20th July 2020
The reduction and elimination of duty on 1600 items will not have a positive impact on the livelihood of the ordinary workers and citizens and the many thousands of workers who have lost their jobs, says the National Federation Party.
NFP Leader Professor Biman Prasad says basic food items like rice, flour, tea, garlic and onions as well medicine was already duty-free but people will still have the burden of paying 9% VAT on them.
“While the list of 1600 items also have food items, an overwhelming majority of them are luxury foods”.
“At the same time 32% duty on milk and butter have not been reduced. So people still are being forced to pay 41% in taxes in the form of 32% duty plus 9% VAT. One wonders if this is to do with the long-term protection given to a local company”.
Edible oil still carries a 15% duty with concessions available to retailers”.
“Similarly, lentils or dhal, another basic food item still carries a duty of 5%”.
“The prudent measure to cushion the impact of high cost of living to the ordinary workers and citizens and the unemployed would have been to remove VAT on basic food items and prescription medicine”.
“In normal economic times, reduction in duty on such a large range of imported goods would have led to an increase in consumption”.
“Right now people are worried about putting food on the table for their families. This is their priority, not to use their hard-earned money to purchase white goods and luxury items in abundance”.
“So Government’s expectation that this reduction would raise consumption demand and increase VAT revenue may be misplaced and unrealistic”.