GEAR UP to pay more for food, household goods and recreational activities come the New Year, say most business houses following their analysis of the measures announced in the 2016 Budget.
People may be under the misconception that living costs will come down simply because VAT has been reduced from 15% to 9%.
They need to consider the following Budget 2016 measures all of which will push prices up:
• 30% increase in port charges
• water rates up 100% for all commercial users
• imposition of 9% VAT on basic food items previously VAT exempt
• hike in Service Turnover Tax from 5% to 10%
• introduction of a 6% Environment levy on a range of businesses
• removal of VAT exemption on the first $30 of FEA Bill
Additionally, the price of local produce – vegetables, fruits, meat etc will rise further as the impact of the current drought worsens.
The hike in Port charges and water rates will add significantly to costs of locally manufactured items. Industry sources say these increases are exorbitant, coming all at once, and will erode their market competitiveness vis a vis imports- to the overall detriment of Fiji’s manufacturing industry.
They will not be able to absorb these and will pass it on to their customers resulting in higher prices.
The Environmental levy of 6% and the 5% increase in STT will add to the cost of transportation, meals, beverages, entertainment and recreational activities.
The impact of a 30% hike in Port charges will be felt across the economy because we import much of what we consume, including raw materials for locally manufactured goods.
Khaiyum said the Environment Tax will not affect the local people and was meant for tourists. He was #lying. This tax applies to you. If you go to the movies, you will pay more. A meal in a restaurant, coffee in a coffee shop – will all cost more under this tax.
Remember, this comes in addition to the STT which was increased from 5% to 10%.
Didn’t we say it was a deceptive Budget?