Mosese Raqio 
[file photo]
Deputy Prime Minister and Minister for Finance Professor Biman Prasad says the reduction in VAT from 15 percent to 12.5 percent, effective from August 1st, is a bold decision by the Coalition Government aimed at easing the cost of living for households.
Professor Prasad told Parliament the VAT cut is expected to deliver around $250 million in savings across the economy and will directly boost the purchasing power of low and middle-income households.
The reduction applies to electricity tariffs, fuel, food items that are not zero-rated, government fees, LTA levies, passports, police clearances and other services. It is in addition to the zero VAT on 22 essential items including prescribed medicines.
Inflation has been in negative territory since February this year, with August recording -3.5 percent compared to +3.8 percent in August last year. The drop has been driven by lower food, beverage, transport and fuel prices.
Prasad says the measure is designed to ensure relief reaches all Fijians, including middle-income families who face rising costs but do not qualify for subsidies.
To protect consumers, Government has also established the Price Monitoring and Enforcement Taskforce which will work with FCCC, the Consumer Council of Fiji and FRCS to ensure businesses pass on the VAT savings fairly.
He says the reform reflects the Coalition Government’s commitment to reducing cost-of-living pressures, promoting fairness and supporting every Fijian household.
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