USP Economy Lecturer Doctor Janesh Sami says the poor and the vulnerable in this country have at least one expectation from the government which is that this government is going to address the cost of living crisis.
While speaking during the Multi-Stakeholder Dialogue on the Fijian Economy organised by Dialogue Fiji, Dr. Sami says this is something the government needs to consider in the upcoming budget.
He says there is a need to systematically analyse the cost of living issue and the government can have an independent assessment so we are better able to understand what form of intervention is possible and what is driving it.
Dr. Sami is suggesting that looking at the cost of living situation, VAT should be at a moderate rate of about 10 to 12 percent which will minimise the impact on the poor and it can be improvised as we go along.
The lecturer adds that if the government makes changes to the VAT rate, it is important for them to look at various social assistance schemes which need to be redefined and strengthened so that the poor and the vulnerable are protected.
Dr. Sami further says the 2023-24 budget has to be prepared well to ensure that we are able to sustain our public finance and deal with the challenges that we encounter in the future. He says the government needs to consider what kind of incentives will be given in this budget.
Dr. Sami says tax increases only will not give us a better financial position and on the other end FRCS needs to target a higher compliance rate and adds tax reforms should be comprehensive.
He says there is very limited scope for change in national expenditure and cutting it will slow down economic recovery but the government can improve the quality of spending.
He says if we do not want to have some tax increases now, where we have some window of opportunity for discussion, we will not have same level of opportunity in upcoming budgets.
Dr. Sami adds either we systematically change some of the rates now or it will have to be changed by a significant amount in the future.
The 2023/2024 National Budget will be delivered at 10am next Friday.
