People such as Naidu who recommend zero-rating of VAT be removed from basic food items have no social conscience - Chaudhry

Fiji Labour Party Leader, Mahendra Chaudhry says people such as Richard Naidu who recommend that zero-rating of VAT be removed from basic food items have no social conscience.

He says Naidu says the Fiji Revenue and Customs Service is saying that the government is losing out on $160 million in revenue.

Chaudhry who as Prime Minister in 1999 initiated the policy to zero-rate VAT on basic food items to make basic food affordable to the poor, says Naidu’s comments is warped logic as the FRCS also told him the same thing in 1999 when he wanted to zero-rate basic food items, yet, they ended up having the highest revenue collection ever.

The FLP Leader says the compelling reason for zero-rating basic food items is to help make it affordable to the nation’s poor –they constitute about 60 percent of our people.

Chaudhry asks whether Naidu has a problem with that.

He says while Naidu is wanting zero-rating removed from basic food items, his Fiscal Review Committee is recommending no changes to personal income taxation.

The FLP Leader says how interesting, as a rich person Naidu says he can afford to pay 15% VAT on his flour, sharps, cooking oil etc but he does not want personal income tax changed.

He says most of our poor, lower and some middle income families do not currently pay income tax.

Only those who earn above $30,000 a year do so.

Chaudhry also asks Naidu whether the other ways of compensating the poor is by giving cash handouts.

He says we know from experience much of the cash handouts are abused – it goes into alcohol, cigarettes etc

Chaudhry says Australia is a much more affluent society than Fiji.

He says minimum wage rate in Australia is $21.38 – more than 500 percent higher than the $4.00 an hour in Fiji from January this year.

Chaudhry says yet Australia has zero-rated GST on a wide range of food items most of which we would consider non-staple in Fiji.

They include bread and bread rolls without a sweet coating (such as icing) or filling, cooking ingredients, such as flour, sugar, pre-mixes and cake mixes, fats and oils for cooking, unflavoured milk, cream, cheese and eggs, spices, sauces and condiments, bottled drinking water, fruit or vegetable juice (of at least 90% by volume of juice of fruit or vegetables), tea and coffee (unless ready-to-drink), baby food and infant formula (for children under 12 months of age), all meats for human consumption (except prepared meals or savoury snacks), fruit, vegetables, fish and soup (fresh, frozen, dried, canned or packaged), spreads for bread (such as honey, jam and peanut butter) and breakfast cereals.

We have asked Naidu for a response.