(L-R) Prof. Biman Prasad, Aiyaz Sayed Khaiyum, Alvick Maharaj

Finance Minister Professor Biman Prasad has defended the Government’s use of VAT revenue and economic policies, citing official inflation data and increased public investment.

This following criticism from Independent MP Alvick Maharaj and former Attorney General Aiyaz Sayed-Khaiyum, who questioned the impact of VAT increases and claimed the cost of living remains high.

In response, Professor Prasad says inflation was negative in April, based on figures from the Fiji Bureau of Statistics, which reflects a decline in overall prices compared to a year ago.

He credited this to falling global fuel and food prices, along with domestic policies such as the zero-rating of 22 essential items, increased social welfare, and the Tertiary Scholarship and Loans Service debt write-off.

He also rejected claims that VAT funds were misused.

Professor Prasad says the additional revenue has allowed the Government to increase funding for health, roads, water, public infrastructure, and income support programs.

The Finance Minister explains that items taxed at nine percent were moved to 15 percent, while those already at 15 percent remained unchanged.

The Deputy Prime Minister stresses that zero-rated items continue to attract no VAT, with prescribed medicines recently added to the list.

He also responded to claims about VAT costs on groceries, calling the suggestion that a $500 basket would incur $75 in VAT inaccurate.

Professor Prasad says the actual VAT depends on the basket’s contents and could be significantly lower if it includes zero-rated goods.

He states that the measures have helped reduce national debt from over 90 percent to approximately 78 percent of GDP.

Professor Prasad emphasizes that the government’s transparent economic management has contributed to growing investor confidence and increased investment.

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