Increase in VAT on non-essential items is relatively well contained – Batiweti

Fiji Commerce and Employers Federation CEO Kameli Batiweti says the 2023-2024 National Budget is a very good budget and the increase in VAT on non-essential items is relatively well contained.

In an interview with fijivillage News, Batiweti says people look at the percentage of the increase in VAT from 9 percent to 15 percent but for instance if someone is spending $50 on their shopping now, the VAT component is $4.50, while they will pay $7.50 in VAT after the increase – which is a $3 increase.

He says VAT on 21 essential items remain at zero percent which is good.

Batiweti says there are certain decisions we as a country need to make to ensure that we work together, pull our weight to try and support the government to reduce the debt that is hanging over our head.

The CEO says the increases of a couple of dollars here and there are sometimes necessary for now for us to take some pain so that in the long run, there is some gain.

He further says the corporate tax was bound to increase but it is a progressive increase and has not reverted to the previous 28 percent. The corporate tax rate will increase from the current 20 percent to 25 percent from August 1st.

He says some of the companies understand the rationale behind increasing the corporate tax.

While responding to questions on returning the FNPF contribution to previous levels of 10 and 8 percent for employers and employees respectively, Batiweti says the transition from coming out of COVID has been a lot quicker than expected but we are still coming out of COVID.

He says the workers are going to benefit and adds this is another strategic move because it means FNPF is able to secure a lot more funds and be able to invest a lot more into the economy.

While responding to questions regarding the review of the minimum wage rate, Batiweti says increasing the minimum wage rate will be hard on the employers however, there is a process that the Ministry of Employment in collaboration with the Ministry of Finance and the tripartite will undertake to arrive at a decision.

He says an amount has been suggested but the process will determine what the ultimate amount will be.

The outgoing CEO says this will include certain calculations and consultations with the employers and the private sector where MSMEs employ 62 percent of the workforce and contributes about 18 percent to the country’s GDP.

Batiweti adds he is certain that Deputy Prime Minister and Minister for Finance, Professor Biman Prasad will embark a research and all that is required to ensure that data will assist in the formation and guidance of the decision that will be arrived at.