Former Finance Minister and Member of Parliament Professor Biman Prasad says Opposition MP Jone Usamate should know that the Government he was part of had a 15 percent VAT, and that people were paying up to 25 percent in taxes during their time in office.
While responding to Usamate’s statement, Professor Prasad says Usamate needs to be honest and understand what he is talking about.
He says when Usamate was a Minister in the interim Bainimarama Government from 2011 to 31st December 2015, VAT was at 15 percent and some basic items were zero-rated or VAT-free.
He also says from January 2016 to 31st March 2022, VAT was 9 percent flat on all goods and services, and no basic food item was VAT-free.
The former Finance Minister adds that during this period as well, a 10 percent Environment and Climate Adaptation Levy (ECAL) and a 6 percent Service Turnover Tax (STT) were imposed.
He further adds that many food items and services incurred a total of 25 percent in taxes, particularly patronising restaurants.
Professor Prasad says this was done as a vote-buying gimmick and claims the list was a direct cut and paste from the NFP manifesto from the 2018 elections.
He stressed that this all changed when they came into Government.
Insert: Professor Prasad on changes, 3 Mar 26
He says this includes salary increases for civil servants, an increase in social welfare from 15 percent to 25 percent, and the $200 Back to School support, which is costing Government more than $45 million a year.
He adds that more than 200,000 students were assisted before the school year began.
Professor Prasad says the government undertook all these measures because of prudent fiscal and macroeconomic management, which has led to increased confidence and growth in the economy.
He suggests that the Opposition MP should not ignore the facts, and should be honest rather than hypocritical about the tax reforms they introduced.
The former Minister also highlighted that Usamate is not acknowledging that the Government increased corporate tax from 20 percent to 25 percent.
When asked about claims made by Usamate that food prices have risen by more than 30 percent in the last two years, and that VAT is still applied on almost every essential item, Professor Prasad says the Consumer Price Index, which measures inflation and the increase in prices of goods and services, clearly shows that there has been a consistent decline in the inflation rate over the past two years.
Insert: Professor Biman on direct support, 3 Mar 26
He has invited Usamate to a debate on their economic record and their ability to manage costs, both in Parliament and outside Parliament, compared to what was done over the previous years.
Professor Prasad says Usamate cannot mislead people by selectively focusing on aspects of the tax reforms and economic policy decisions made in the last three years.
