Impact of Changes in Value Added Tax Rate on Revenue Production, Perspective of Government, Business, and Individuals: A Case of Fiji Islands

Abstract

Purpose: The primary objective of this study is to investigate the impact of changes in the Value Added Tax rate on revenue production in Fiji. The study aims to explore how changes in value-added tax rate affect the government, businesses, and individuals in the country. Methodology: A secondary research method was utilized to gather data. Data is collected from multiple sources, including government statistics, existing literature, and survey reports. The study then employs descriptive, narrative, and qualitative analysis techniques to interpret the collected data. Findings: The findings of the study reveal that changes in value-added tax rates have both positive and negative impacts on key stakeholders, namely the government, businesses, and individuals. The descriptive analysis provides an explanation of these results from the perspectives of these stakeholders. Practical Contribution: The study offers insights to stakeholders, including government, businesses, and individuals, on how to implement effective strategies to mitigate financial risks associated with changes in VAT rates. This information can be valuable in decision-making and financial planning. The study provides strategies for regulators and standard setters to reform the tax change reporting model. This can lead to more efficient and transparent tax policy implementation, potentially benefiting the broader economy. Theoretical Contribution: The research contributes to the literature on Value Added Tax by providing an empirical study. This contributes to a deeper understanding of how VAT rate changes impact the different stakeholders, which can be valuable for both researchers and policymakers. The study introduces a strategic model that offers a holistic understanding of the interconnected factors affecting changes in tax policy. This model can serve as a framework for analyzing and formulating tax policies in Fiji, as well as potentially being applicable in other contexts. Study Limitations – Limited sample size.