Increase of VAT to 15% for certain items and removal of bus fare subsidy

The Consumer Council of Fiji has commended the Fijian Competition and Consumer Commission for its prompt and decisive action in addressing the issue of excessive price increases of chicken in the wake of the recent VAT hike.

Consumer Council of Fiji CEO, Seema Shandil stated this earlier adding that while the VAT increase was implemented at a reasonable 6 percent, they have observed certain traders unjustifiably raising the prices of essential goods, particularly chicken, by as much as 25 percent.

Shandil says numerous consumers have raised their concern regarding the disproportionate price hike on chicken and other essential products following the implementation of the tax increase.

She further says according to their analysis, there is a significant discrepancy between the VAT rise and the subsequent price increases imposed by certain traders.

The CEO says while a 6 percent VAT hike would naturally warrant a marginal increase in retail prices, some unscrupulous traders have taken advantage of the situation, imposing unjustified and excessive price surges on consumers, especially on chicken - a staple protein source for many Fijian households.

She further says in response to these concerning developments, they are calling for stringent measures to address the issue and protect consumers from price exploitation.

Shandil says the warning sounded by FCCC that if businesses continue with price exploitation on chicken, they would consider regulating the prices is welcomed by the Council.

She further says however, we also need some deterrent in the form of enforcement actions against traders engaging in such practices.

The Council CEO says we cannot leave consumers’ interest and financial well-being at the discretion of businesses that seem to only care about their profit margins.

She further says that while a price reduction can be seen after FCCC’s intervention, some supermarkets have labelled this decrease as a discount; with a validity till the 31st of this month.

Shandil says they are calling on traders, particularly supermarkets to justify why there is a price validity date and what will happen to the prices come next month.

She asks are they going to resort to price exploitation again?

The CEO says this needs to be immediately answered and addressed as the Consumer Council of Fiji recognizes the importance of collaborative efforts between regulatory bodies and consumer advocacy organizations to ensure that consumers' rights are upheld and will work with enforcement bodies to ensure the interest of consumers are protected.

She further says as we move forward, the Consumer Council of Fiji encourages consumers to report any instances of price gouging or price via the toll-free number 155 or email complaints@consumersfiji.org.

The Fijian Competition and Consumer Commission has confirmed that the list that is being circulated on social media that was created by the Fiji Labour Party is totally incorrect.

FCCC CEO Joel Abraham says they have sought clarification and have spoken to the Party Leader, Mahendra Chaudhry, and they have also sent FLP a letter asking them to clarify their stance and position.

He says they note that the post of that price list was developed as a matter of trying to raise some awareness before the budget announcement.

He adds that some people are now taking that price list and in a deliberate attempt to spread misinformation, have circulated this, telling people that the government has increased the price.

The CEO says they have done an assessment, and after their on-site verification, the items on the FLP list should have a zero percentage increase.

Abraham is also calling on members of the public to get their information from trusted sources.

The Fiji Revenue and Customs Service in collaboration with the Fijian Competition and Consumer Commission has formed a Price Surveillance Taskforce and the two organisations have intensified inspections and are closely monitoring the market to ensure that the changes in the VAT rates and customs duties announced in the 2023/2024 National Budget are reflected correctly in the final prices and consumer interests are protected.

In a joint statement by FRCS and FCCC, they say effective from 1st August, the three VAT rates have been replaced with a simplified two VAT rate system.

They say the 9 percent VAT has increased to 15 percent while the 0 percent VAT rate has been maintained.

They say the 21 zero-rated VAT items have been increased to 22 items with the addition of prescription medicine and prescription drugs.

Additionally, import duties have been reduced on sheep and lamb meat, prawns, ducks, corned meat of lamb, sheep and beef, canned mackerel, canned tomatoes and chicken portions.

The FRCS team has also been conducting analysis of shipping and other related costs to verify the pattern of price changes.

FRCS Chief of Staff, Shavindra Nath says that it is important to ensure that the intention of the budget policies announced by the government is achieved.

He says when taxes or duties are reduced, the intent is to reduce the prices of these products and promote consumer choices and if the prices are not reduced, then it defeats the purpose of these changes.

Nath says that is why it is critical for agencies such as FRCS and FCCC to monitor that these changes are correctly reflected in the prices.

He adds the VAT zero rating has been maintained and in fact, increased with the inclusion of prescribed medicine and drugs and the increase in VAT from 9 percent to 15 percent should not impact the prices of these zero-rated items.

The FRCS Chief of Staff says they are aware that a large majority of retailers wish to comply with the law, and they are willing to help and guide them so that they can implement these changes correctly, however, instances of deliberate non-compliance will be dealt with strongly.

FCCC CEO, Joel Abraham says cost of living is a matter that resonates deeply within the communities and it is not just an economic issue; it's a fundamental aspect of daily life that affects families across Fiji.

Abraham says the collaboration between FCCC and FRCS on Price Surveillance is more than a regulatory step; it's an initiative aimed at safeguarding the welfare of all citizens.

He says the new VAT system and duty reductions should make essential goods more affordable and they are committed to ensuring these changes are accurately reflected in market prices, and any non-compliance will be met with decisive action.

He adds together with FRCS, they are working to ensure the government's intentions become real benefits for our people, focusing not just on compliance but on enhancing their quality of life.

Prime Minister Sitiveni Rabuka is calling on Fijians to make use of any square meter of land around their house and plant fruits and vegetables to counter the increase in food prices following the increase in VAT to 15 percent.

He says he has heard of people complaining about the cost of living and he believes that some of these burdens could be cushioned if food gardens were encouraged.

Rabuka says we all know of the hardships we are facing at this moment.

He says those things we do not have control of because most of the things we are angry about, that are expensive, are brought from overseas.

The Prime Minister says eat traditional staple food and avoid processed food that is more expensive because of the increase in VAT, avoid unnecessary travel, avoid addictive expensive 'play things' like toys and video games for children, avoid 'excesses' in everything - yaqona, tavako or cigarette, alcohol, 'kalavata' and trendy fashion wear - buy 'smart and comfort' clothing for cold spell.

He adds buy 'needs' and not 'wants' and 'never nice to haves'.

Two incidents have been noted by the Fijian Competition and Consumer Commission where community shops exorbitantly increased the prices of items sold in their shops.

FCCC CEO Joel Abraham says their team quickly identified these incidents and its been isolated and rectified.

Abraham says the most vulnerable consumers are in villages and rural settlements and these consumers need protection, which is why they have deployed teams to the rural and maritime areas.

He is calling on consumers in the rural and maritime areas that if they face any issues regarding the cost of any item they should contact FCCC immediately so they can take action.

The CEO says one of the challenges they are facing as enforcement officers is that they cannot be everywhere all the time and they are relying on consumers and consumer champions based in communities to report issues to them.

While certain consumers have called for understanding and acceptance of the government’s policies on VAT and bus fares, some say they have been caught by surprise at the sudden hike in the cost of living, while others have expressed concern and disappointment at the lack of monitoring of price movements in the market.

While speaking to fijivillage News, Mohammed Nawaz of Savutalele settlement says the imposition of 15 percent VAT on certain items is a good move and he has noticed the prices of some items going down.

Kelera Morell from Delainavesi says she did not notice any significant reduction in prices, but she only noticed an increase in vegetable prices in the market.

USP student Meli Naisele says for tertiary students, they will now have to tighten their budget and make wiser financial decisions.

Daiana Tagica who resides in Nabua raised concern about corner shops ripping off customers and the lack of monitoring by the authorities.

Single mother, Emi Whippy of Veiquwawa settlement says we cannot do anything about the increase in prices but accept the changes that have been made.

A Nausori resident who wishes to remain anonymous expressed his frustration saying that most people were not fully prepared financially for the sudden increase in VAT and bus fares.

The Government is extremely concerned with the exorbitant increase in chicken prices charged by a few unscrupulous traders in the last few days.

Deputy Prime Minister and Minister for Finance Professor Biman Prasad says it's clear that some of these traders have tried to take unfair advantage of vulnerable consumers and to some extent sensationalise the VAT increase for reasons better known to them.

He says Government had formed a price surveillance taskforce comprising of FCCC, FRCS and the Ministry of Finance to monitor prices after the budget announcement, and they have clearly noted a disproportionatly large increase of over 30 percent in chicken prices in the last 2 days charged by few unscrupulous traders.

Professor Prasad says while chicken prices should have only increased by 6 percent given the increase in VAT from 9 to 15 percent, these businesses in their own commercial interest went ahead to increase prices by over 30 percent.

He stressed that this is unacceptable and they thank those industry stakeholders that have come out quickly to clarify this issue.

He says they expect that the market will immediately rectify this anomaly and he has also been advised by FCCC and have also got assurance from some of the industry players that chicken prices will be brought down immediately.

The Minister is reminding businesses that this kind of unscrupulous behaviour seen in the last 2 days is highly unacceptable.

The Deputy Prime Minister is also reminding the industry stakeholders that the poultry industry is highly protected by Government with a 32 percent fiscal duty and a 10 percent import excise duty.

Professor Prasad says this is a total tariff protection of 42 percent and they are only doing this to ensure that our citizens get affordable and high quality chicken products from the domestic market.

The Minister says the chicken wholesale and retail market is unregulated and they believe that there is sufficient competition in the market to avoid carteling and price fixing.

He says they are closely monitoring this situation and if need be, Government is prepared to take tough measures on those trying to distort the market.

Meanwhile, in a press conference this afternoon the CEO of FCCC Joel Abraham called on traders that exorbitantly increased the chicken price due to the increase in VAT, to stop this unethical practice or they will have to impose price regulation.

Abraham says they received a lot of concerns yesterday regarding the exorbitant price of chicken, namely Rooster and Crest Chicken.

He says they had noticed that some of the prices had reached as high as $33 but the specific product should be in the price range of $21 to $23.

Abraham says they have contacted the wholesalers and retailers, and under no circumstances, FCCC has told them that they can unethically raise the price.

He adds they have informed the stakeholders that if they do not correct their practices, FCCC will not think twice about imposing price regulation for this item.

The CEO says their officers have been monitoring the situation from yesterday and they have already started seeing reduction in price.

Abraham adds they hope from tomorrow and heading to the weekend, the prices are going to come down and it should be reflective of the changes in VAT and any other cost adjustments that are legitimate.

The Fijian Competition and Consumer Commission has called on traders that have exorbitantly increased the price chicken due to the increase in VAT to 15 percent, to stop this unethical practice or they will have to impose price regulation.

FCCC Chief Executive Officer, Joel Abraham says they received a lot of concerns yesterday regarding the exorbitant price of chicken, namely Rooster and Crest Chicken.

He says they had noticed that some of the prices had reached as high as $33 but the specific product should be in the price range of $21 to $23.

Abraham says they have contacted the wholesalers and retailers, and under no circumstances, FCCC has told them that they can unethically raise the price.

He adds they have informed the stakeholders that if they do not correct their practices, FCCC will not think twice about imposing price regulation for this item.

The CEO says their officers have been monitoring the situation from yesterday and they have already started seeing reduction in price.

Abraham adds they hope from tomorrow and going to the weekend, the prices are going to come down and it should be reflective of the changes in VAT and any other cost adjustments that are legitimate.

Price changes are a function of demand and supply in the market, and it’s not on any sitting government and won’t be for the next one.

This was highlighted by the Fijian Competition and Consumer Commission CEO Joel Abraham while clarifying how prices will be impacted by the recent 15 percent VAT increase.

He says prices constantly and continuously change, and many factors affect price change, including taxes and freight costs.

Abraham says all these factors do not move in one direction.

He says FCCC is a price regulator, and its job is to ensure that prices in the market are reflective of one true cost, meaning that businesses are not profiteering and exploiting vulnerable consumers.

The CEO also highlighted that two weeks have been given to companies to rectify the price changes on the goods and services they provide.

Abraham says during this period, the FCCC, the Consumer Council of Fiji, and FRCS will be undertaking joint inspections to ensure the system price is all correct and the company is moving swiftly in amending the shelf prices.

He says some major retailers carry 30,000 to 40,000 different line items, and changing the stickers overnight may not be humanely possible, and they have to also think of the employees who will be making the changes.

Abraham says they have over 500 matters in court, and in four cases, traders received a hefty fine for breaching the law.

He adds one trader was fined about $250,000 and ordered to pay $10,600 compensation, while two retailers received a fine of $15,000 each.

The CEO says the reduction of freight cost has also been felt as they have noted that the price of more than 200 items have decreased.

There are many measures in the budget which are designed to help our people, particularly those in the lower income category and are being ignored by critics who are hell bent on gaining some political mileage.

This has been highlighted by Deputy Prime Minister and Minister for Finance, Professor Biman Prasad who says critics must firstly understand that 22 items including prescribed medicine have zero vat.

He says in addition to that, the government has reduced duty on items that most people consume daily such as meat where prices are expected to go down.

Prof. Prasad says the critics do not talk about the increases in social welfare allowances in all categories, increase in social pension rates and increases in health, agriculture, and education budgets.

He says the forgiving of TELS loans has helped more than 50,000 families who do not now have a burden of paying their debts.

The Deputy Prime Minister says this is a huge relief to thousands of young people and their parents and these savings obviously is an addition to their take home pay.

He further says they also forget that soon after the coalition came into government, it provided $200 each for more than 214,000 students to get back to school.

Prof. Prasad says additionally, $45 million has again been allocated in the 2023-2024 budget to continue the back-to-school support.

He says this means that again, before the school opens in January 2024, more than 200,000 children right from preschool to high school will get $200 each to support them getting back to school.

Prof. Prasad says critics know that 2023-2024 budget is a well thought out and balanced budget which looks after our people in the lower income categories but also ensures that government earns enough revenue to deal with the massive debt burden and to fix our deteriorating infrastructure in health, roads and water.

The Fijian Competition and Consumer Commission are warning all traders not to engage in any unethical practices after VAT increased to 15 percent from today for items that are not under the zero-rated items.

While speaking at a press conference this afternoon, FCCC CEO Joel Abraham says following the budget announcement, they have undertaken more than 800 inspections and surveys around the country.

He says 20 traders have been found breaching the law, and the common breaches were to do with the display of prices as well as overcharging.

Abraham says over the last six weeks, they have collected baseline data through multiple surveys, and they are currently carrying out a joint surveillance exercise with the FRCS and Consumer Council of Fiji.

He further says there have been numerous instances where people have reported increases in price before the 1st of August, but these increases have been isolated - not to the changes in VAT but the changes in the cost structure such as transportation and supply cost.

Abraham is reminding traders that any changes to the price of any goods and services that are not attributed to changes in taxes will have to be explained by the trader, and if there is no reasonable explanation, FCCC will take action as this constitutes over charging.

The CEO says to ensure a smooth transition, they have increased their ground enforcement activity to ensure compliance in alignment with the recent budget changes.

He says they have intensified their inspections and market surveyors to continue their practice of ensuring fair trade in the market as well as consumer protection.

Abraham further says by closely monitoring the market, they aim to safeguard consumer interest and any potential exploitation of consumers.

He adds they hope to maintain a fair and competitive market place and consumers are urged to contact them or the Consumer Council of Fiji if they have any complaints against a trader or suspect a trader not following the law.

People say they have been drastically affected by the 15 percent increase in VAT for those items that are not zero rated and 10 percent subsidy on bus fares while social welfare recipients have different views on the increase.

70-year-old Leba Mereula of Tovu, Totoya in Lau says the $25 increase in the Social Welfare assistance is not enough and will not assist them in this financial crisis.

While speaking to fijivillage News, Sharman Govind of Tamavua, the increase in VAT will affect his family as he is the sole bread winner, working as a shoe repairer in Suva.

Siteri Naceva of Khalsa Road says she agrees with the increase in VAT as it will help pay our debts.

She says the citizens of Fiji can bare for a little since paying back the debt will leave a better Fiji for the future.

Leba Mereula says the employed citizens in Fiji will not only be affected by the rise of food prices, the rise of fuel prices and bus fares but those in the maritime islands will be affected the most.

Mereula who is a social welfare recipient says other recipients living in the village will be the worst affected by this.

74-year-old Chandrakali from Waila Settlement says she is happy that the government has increased their allowance by $25.

She says the prices of a lot of things are going up and she is asthmatic and has had a heart attack so this will help her buy more things for her home and medicine.

You will have to fork out more money for busfare from today as the 10% subsidy on bus fares comes to an end.

This means you will have to pay the 10 percent that government was previously covering.

Stage 1 fares which used to cost 95 cents are now $1.02, Stage 2 fares from $1.45 goes up to $1.61 while Stage 3 fares increases from $1.99 to $2.21.

The Fijian Competition and Consumer Commission made the changes in accordance with powers under the Land Transport Act 1998, Section 66C, as the transport sector price regulator, empowered under the “FCCC (Control of Fares and Charges for Public Service Vehicles) Order 2023”.

The FCCC says all bus fares will revert to those fares applicable in “Final Authorisation for Fares and Charges for Public Service Vehicles in Fiji” issued on 6th May last year.

This reflects the cessation of subsidy program initiated on 1st August 2022 that ended last night.

They say for clarity, the “Final Authorisation for Fares and Charges for Omnibus Services in Fiji” contains separate schedules for Viti Levu, Vanua Levu, and Taveuni, which includes fares for all stages.

FCCC says they remain committed to fostering a fair and equitable public transport system for the benefit of all Fijians.

Full bus fares list