PM’s Justification for Higher VAT and Taxes a Smokescreen – Hon. Premila Kumar

Hon. Premila Kumar, MP, says it is concerning that the Prime Minister continues to justify higher VAT and taxes under the disguise of funding infrastructure and improving government services.

She says this misleading narrative attempts to mask the Coalition Government’s poor performance and misplaced priorities.

“Despite increasing VAT from 9% to 15%, raising corporate tax, and imposing higher government fees and charges, there is no visible improvement in public services or infrastructure. Fijians are rightfully asking: Where is the development?”

Kumar adds that what the country now has is a government that is spending more, taxing more, but delivering less.

“They’ve created 34 ministerial and assistant ministerial positions, many of which have overlapping or vague responsibilities. These positions come with staff, vehicles, allowances, and offices, all draining public funds. Fijians have also witnessed an increase in diplomatic missions and overseas travel, all funded by taxpayers, but without any corresponding improvement in service delivery to benefit Fijians who pay for these.”She points out that hospitals remain overcrowded, there is a shortage of beds and life-saving medicines, and even power outages in hospitals and health centers.

According to Kumar, communities that have never experienced water cuts are now regularly affected—including major hospitals.

Kumar adds that roads are deteriorating, lawlessness and crime are on the rise, and social issues like domestic violence and robbery have also increased.

“Meanwhile, the government’s operational expenditure has ballooned, and basic service delivery has deteriorated. What justification can the Prime Minister offer for this disconnect? If higher taxes were genuinely intended to improve services, where are the outcomes?”

Kumar also reminds the public that the initial justification for increasing VAT to 15% was to repay debt. “However, to date, not a single cent has gone toward debt reduction. Government debt has risen by over a billion dollars despite the tax windfall, as reported by the Fiji Revenue and Customs Services. There have been no major natural disasters or transformative capital projects. So, where did the money go?”

She calls out the Prime Minister’s claim that lowering VAT would benefit the rich more than the poor. “The reality is that the poor spend a much larger proportion of their income on goods and services that are still taxed. A VAT cut would significantly ease their burden. If the rich were benefiting more, why has the cost of living become unbearable for those at the bottom who cannot afford to pay higher taxes?”

Kumar adds that both the wealthy and the poor enjoy VAT exemptions on 22 essential items, but everything outside that list is more expensive.

“Meanwhile, social protection programs introduced by the Bainimarama Government have weakened. Free bus fares for individuals turning 60 have been eliminated. Pensioners aged 70 and above are not receiving any real increase; instead, their bus fares have simply been combined with their pension, creating a misleading impression of an increase. Previously, pensioners received a separate $40 bus fare per month with a rollover option.”

She says only taxpayers bear the burden of belt-tightening—not those in power.

“What tangible progress can this Coalition Government highlight? There have been no major developments, no significant capital works, and no policies that have improved the standard of living for Fijians.”

“To add insult to injury, government officials are often overseas, racking up travel bills while teachers await their salaries and FNPF contributions. Meanwhile, they expect Fijians to applaud them for paying civil servants a day early.”

“This government has now been in office for 28 months. The excuses need to end.”

“Fijians want to see the changes promised during the election campaign. They want a government that takes responsibility, uses taxpayer funds wisely, and delivers real improvements to their lives,” Hon. Premila Kumar said.