Fiji’s Fiscal Review Chair, Richard Naidu. [Photo: FILE]

Fiji has few options to raise government revenue as growing spending pressures continue to strain public finances.

This, according to Fiscal Review Committee Chair Richard Naidu.

Speaking at the State of the Economy Dialogue 2026, Naidu said the country’s narrow tax base leaves the government with limited avenues to generate additional income.

He said VAT remains the only realistic tool capable of significantly boosting revenue.

Naidu argued that the government’s decision to reduce Value Added Tax was a mistake because it removed hundreds of millions of dollars that could have been used to fund essential services and infrastructure.

He said the lost revenue is needed as government faces rising demands in health, education, infrastructure and climate resilience.

According to Naidu, personal income tax offers little room for expansion because most workers fall below the current tax threshold.

He said this leaves the government with few practical alternatives if it wants to increase revenue.

Naidu also questioned whether the VAT reduction delivered meaningful relief to consumers. He said the measure may have generated positive headlines but had little effect on the cost of living.

According to Naidu, Fiji’s open economy limits the government’s ability to control prices directly. Instead, he said efforts should focus on lifting productivity and increasing incomes. Despite his concerns, Naidu acknowledged improvements in fiscal policymaking over the past three years.

He said there was now greater public discussion on economic issues and more certainty around taxation policies.

Naidu noted that Fiji had not undertaken a Fiscal Review Committee review since 2004, making the 2023 process a significant step.

However, he warned that debate alone will not solve Fiji’s fiscal challenges. He also points out that difficult decisions will be needed if the government is to secure the revenue required to meet the country’s growing needs.

Naidu states it is fair to question how public money is spent, but without sufficient revenue, government has fewer options to address national priorities.