Government chooses income growth over tax policy

July 7, 2024 7:53 am

Finance Minister Professor Biman Prasad says the strategy to reduce the cost of living doesn’t or no longer rests on the country’s tax policy.

Giving an example of items that are zero VAT rated, Prasad says prices have still gone up as import and production costs have gone up.

He says that from a government’s point of view, the fundamental problem of high cost of living can be resolved by raising people’s income.

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“So in the last budget, we consciously provided additional funding for the agriculture sector. Big increase. We provided subsidies for non-sugar crop sectors, fertilizer, we decide. Sugar came from us, got the record price last year and again even higher this year. We see income growth in the rural sectors because of government’s policy.”

Finance Minister Professor Biman Prasad

Prasad further states that they felt a need to raise the minimum wage because the Fiji National Provident Fund data shows that naturally the formal sector wages and salaries have gone up by 10 to 12 percent.

“So there is that natural adjustment that has taken place. But for those on the lowest end of the income or wages, we felt that it was important for us to raise the minimum wage.”

The minimum wage will rise to $4.50 from August 1st and will increase to $5 from April 2025.