The SDL government has increased duty by 5% on hundreds of food and everyday consumer items ranging from rice, tea, honey and biscuits to toothpaste and shoe polish in its 2004 Budget.
The move, expected to increase government revenue by $5 million, has been condemned by Labour Leader Mahendra Chaudhry as one that would increase the suffering of the poor.
Finance Minister Ratu Jone Kubuabola said increasing duty from 10 per cent to 15 per cent was “in line with government’s efforts to consolidate our tariff structure” to four bands – zero duty, 3 per cent, 15 per cent and 27 per cent.
But Mr. Chaudhry said it was in direct contradiction to the policy of deregulation and trade liberalisation under which VAT had been introduced. “The whole idea behind the introduction of VAT was to eventually get rid of Customs and import duties.”
In fact, while duty on more than 500 items have increased from 10% to 15%, only six items have had duty reduced from the current 20 per cent to the new 15 per cent level.
Mr. Chaudhry said Government was broke and needed to earn some revenue which, unfortunately, it has chosen to do by penalising the poor .
“The increases would make life difficult and some families would have to go without basic food items,” said Mr Chaudhry.
“It is ironic that while increasing duty on these food items Government had chosen to bring down corporate tax by one per cent and also taxes of certain items which would benefit companies and businesses with close connections to the Government, he said.
Increase in duty on rice, tinned fish, fruit juices and canned fruits, tea, coffee, powdered and condensed milk, biscuits, cheese, yoghurt and chocolates would put these items already highly prices, out of the rich of the poor.
The full range of affected items include: Toothpaste, boot polish, disinfectants, antiseptics, plastic school or office supplies, erasers, tyres, bags, rope, pork, ham, fish, oysters, mussels, cream, powdered milk and cream, evaporated or condensed milk, yoghurt, cheese, honey, fresh or chilled tomatoes and lettuce, anything coffee-related, green and black tea, sausages, chocolates and cocoa products, pickled cucumbers and gherkins, preserved tomatoes usually in canned form, mushroom, unfrozen peas, beans, asparagus, mixed vegetables, all carpets, plastic or rubber tubes, pipes and fittings, dog and cat foods.