Gov yet to consider waiving VAGST on basic food items in light of pandemic


The Samoa Government has yet to consider waiving taxes on basic food items, such as sugar, flour, rice, canned fish, cooking oi at this point but it doesn’t mean they cannot look into it.

This is according to the Deputy Prime Minister Tuala Iosefo Ponifasio responding to queries whether this is something the Ministry of Custom and Revenue will look into during the economic downturn as a result of the COVID 19 pandemic.

“What we have estimated is that It comes at a very high cost of not less than a 100 million tala a year and the question is whether the country can afford to do it.

“We have to consider it together with other fiscal commitments of government in our next budget spending. Govt will roll out $51 million directly into the community along with other support programmes to boost community initiatives and developments.”

The Deputy Prime Minister says the Government of Fiji is doing this and have announced the waiver of tax on such basic food items.

“Our government prioritise community wellbeing and there will ongoing discussions to ensure one of its priority in its [mandates] is carried out.

“Usually the chamber of commerce will prepare a submission to Ministry of Finance and in turn, they will prepare a paper for Cabinet to consider.

“There is also our continuous review to try and lower taxes on healthier options such as fruit and imported vegetables.

Therefore at this stage, I do not see a need for us to reduce tax further on these food items,” said the Deputy Prime Minister.

Last week, the Fijian Government announced that on the 1st April 2022, sugar, flour, rice, canned fish, cooking oil, potatoes, onion, garlic, baby milk, powdered milk, liquid milk, dhal, tea, salt, kerosene, cooking gas, soap, soap powder, toilet paper, sanitary pads, and toothpaste are all going to become VAT zero-rated.

While announcing 2021/2022 Revised National Budget, Minister for Economy, Aiyaz Sayed-Khaiyum says in total, this reduction will send $163 million in tax revenues back to the Fijian people and alleviate the cruelest burden that the pandemic. 

Sayed-Khaiyum says the government will continue to review the price of food and other essentials as time goes on, a flexible policy posture will be maintained to adapt to the current circumstances.