The imposing of VAT on the basic food items reduces the overall cost of living and this is the reason why the Fijian government imposed VAT on the basic food items.
Acting Prime Minister, Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum made this clear while responding to the question on why the government imposed VAT on basic food items during the 2017/2018 National Budget Consultation with the Private Sector in Suva last night.
Sayed-Khaiyum was asked to explain why this was done as the 2014 FijiFirst manifesto said that no VAT would be imposed on the selected basic food items.
He says it was complicated tax system in the past where some items were not charged VAT, and a lot of people were stealing from the system. The Minister adds that apart from the basic food items, people also need water, electricity and education and which are now free under the Free Water Scheme, electricity subsidy program and free education program.
Sayed-Khaiyum stresses that people now have more disposable income in their pockets and the cost of living has come down by 4.5 percent. He says that people should also remember about the income threshold which increased from $8,500 to $16,000 which means that they are now taking more money home.
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