Reconsider VAT: Dialogue Fiji
“The cut in the FRA’s budget means that even with improved efficiency or changes in contracting modalities, less can be achieved in maintaining and upgrading our road infrastructure,” Mr Lal said
Monday 01 July 2024 | 15:16
Dialogue Fiji executive director Nilesh Lal hopes Government reconsider the Value Added Tax (VAT) rate in the next budget to address the high cost of living in Fiji.
Mr Lal said despite the positive aspects of the 2024-2025 National Budget, the organisation was concerned about the reduction in allocation for the Fiji Roads Authority (FRA).
Minister for Finance Biman Prasad announced last Friday that the Ministry of Public Works was allocated $721.4 million, including the funding for the Water Authority and FRA.
Related stories
FRA is provided $354.8m in the budget for ongoing constructions and maintenance of roads, upgrading and replacement of bridges and jetties and upgrading of rural roads.
Mr Lal said the deteriorating road conditions and rising costs of materials and labour, the budget decrease was worrisome.
“The cut in the FRA’s budget means that even with improved efficiency or changes in contracting modalities, less can be achieved in maintaining and upgrading our road infrastructure,” Mr Lal said.
“This is a setback that could have long-term negative impacts on connectivity and economic activities across the country.”
He said it was normally expected that if the national budget increased from one fiscal year to another, capital expenditure and those allocated for entities responsible for infrastructure development, should increase proportionally, rather than reduce.
He said projected revenues in the budget appeared optimistic and it was critical for Government to avoid creating further political instabilities that would affect growth prospects should these projections fell short, the actual deficits would be higher than anticipated.
“There is clearly a need to examine factors which have led to the slowing down of the growth momentum, perhaps through a multistakeholder dialogue, and then address these to create conditions to support growth,” he said.
“Otherwise, medium- and long-term objectives to bring down debt to Gross Domestic Product (GDP) ratios and more will remain elusive.”
He said creating the right conditions to realise the GDP growth potential was key.
Dialogue Fiji would host a post-budget forum on the July 2 in Suva where Mr Prasad would be the keynote speaker.
It is expected to be attended by representatives of various sectors to provide reactions and deliberate on the implications of the budget.
Feedback: shratikan@fijisun.com.fj
