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News

VAT reduction insignificant to costs: FRCA

August 4, 2014 1:01 am

The Fiji Revenue and Customs Authority says a reduction in Value Added Tax will have little impact on the price of goods.

VAT has become a talking point in the lead up to the elections with a number of parties promising to reduce VAT if elected into government.

However, speaking on 4 The Record last night, FRCA Chief Executive Jitoko Tikolevu says a VAT reduction is nothing to get excited about.

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What’s really driving up prices in Fiji are external factors.

The issue really is the loading of cost, manufacturing cost, shipping cost and all that, they continue to escalate from abroad and that’s outside out control anyway. The landed cost is already high and over the years the costs have continued to increase, so in a way the zero percent VAT is redundant. Whether VAT goes up to 20% or down to 10% – whatever changes we make will be very insignificant.

Tikolevu adds the majority of VAT is collected from non-basic items such as vehicle sales, electrical products and sin goods.

The VAT rate in Fiji is currently 15 per cent.

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