29 Nov 2010

Fiji's VAT increase seen as disastrous for the poor

1:39 pm on 29 November 2010

A campaigner helping to alleviate poverty in Fiji says the government's decision to increase sales tax is a disastrous one.

The interim regime announced a two and a half per cent increase in VAT to 15 per cent in its budget last week.

Father Kevin Barr of the People's Community Network says people have already been hit hard by an increase in food prices due to Fiji's devalued dollar, despite attempts to control prices.

He welcomes a new initiative to extend food vouchers to another 10,000 people, but says the budget's initiatives aren't enough to address the needs of the third of the population living below the poverty line.

"We don't have decent wages, we don't have unemployment benefits, and we have a very inadequate social welfare system so when VAT is increased in a country like Fiji it has much more serious effects than it would have in a developed country."

Father Kevin Barr welcomes infrastructure improvements promised by the government but says he's still waiting for certainty on the introduction of a minimum wage for Fiji workers.