Finance Minister, Professor Biman Prasad

The Finance Minister, Professor Biman Prasad, says all recommendations by financial agencies and relevant stakeholders will be taken on board, but the final decision on Fiji’s value-added tax rate will be made by the government.

He was responding to recommendations made by the World Bank to increase VAT and also extend it on essential items, which are currently zero-rated.

The Fiscal Review Committee has also made similar recommendations but says VAT should not be higher than 15 percent.

Professor Prasad says the World Bank report has been presented to them, but that does not mean they are going to respect all the recommendations.

He states that at the end of the day, the government will decide what it wants to do.

“So some irrelevant politicians from outside who are saying its shocking that we are going to do what the World Bank is saying is ridiculous. Those irrelevant politicians are lying about the fact that they know that the World Bank, the IMF do their reports and it is up to the government at the end of the day to assess what are their recommendations. Of course we will read those reports, we will understand those reports and see where the World Bank and others are coming from.”

The standard VAT rate in Fiji is nine percent, and according to the World Bank, this is among the lowest in the region and the third-lowest among benchmark countries.