7 Nov 2006

Fiji's VAT increase expected to earn US$60 million

11:26 am on 7 November 2006

The Fiji's government decision to increase Value Added Tax on almost all goods and services from 12.5% to 15% in the 2007 Budget is expected to earn the state another 60-million US dollars.

VAT will remain the government's largest single source of revenue, earning over 270-million US dollars next year.

But president of Fiji's Council of Social Services Lorine Tevi has criticized the increase and issued a statement saying the VAT increase is shameful and the government has reneged on its election promise.

Mr Tevi says it will negate all poverty reduction measures, cut into family income, is a prescription for social disharmony like an increase in crime, more school dropouts, more drug and substance abuse, and more family breakups.

Women's rights group in Fiji have also termed the VAT increase as unfair and burdening the poor and less fortunate in society.