11 Nov 2002

Fiji's prime minister has defended the 2003 budget against criticism from opponents

10:38 am on 11 November 2002

Fiji's prime minister, Laisenia Qarase, has defended the 2003 budget against criticism from opponents.

In particular, the critics have focussed on the 25 percent increase in the Value Added Tax or VAT, from 10 percent to 12-POINT-5 percent on all goods and services designed to raise another 30 million US dollars.

They say this will hit hard on the poor and the marginalised who comprise 50 percent of the population.

Mr Qarase says the budget is not designed to please everyone but to implement government policy to carry the country forward.

He says the government is spending a lot of money on poverty alleviation and rural people as well as raising the tax threshold of the low-paid to help cushion the impact of the VAT increase.

The prime minister says the government has considered all the alternatives and finds it absolutely necessary to increase VAT to fund development programmes because revenue from customs tariffs will decline as a result of world trade liberalisation.