Twenty-one everyday food items, including sugar, flour, and rice become VAT exempted effective today as was recently announced in the Fijian Government’s revised budget which also imposed a six per cent increase in VAT on certain goods and services including white goods, clothing and footwear.
Items for which VAT has also been scrapped include baby milk, liquid milk, powdered milk, tea, dhal, salt, canned fish, cooking gas, cooking oil, garlic, kerosene, onions, potatoes, sanitary pads, soap, soap powder, toilet paper and toothpaste.
In announcing the revised budget on Thursday, 24 March, Minister for Economy and Attorney General Aiyaz Sayed-Khaiyum said the government expected to lose around $163 million in tax revenues from removing VAT on these goods.
This is expected to be eased by the increase in VAT from 9 per cent to 15 per cent for items that were charged ECAL previously. These items were previously charged 9% VAT plus 5% ECAL. The removal of ECAL and the increase in VAT represent a one per cent increase. These goods and services include alcohol, tobacco, textiles, clothing and footwear, perfumes, jewellery, watches, stereos and sound systems and other electrical equipment, and professional services such as legal and accounting, management and consultancy, architectural and engineering, scientific research and development, advertising and market research, veterinary activities and other professional, scientific and technical activities.
