Though Value Added Tax has increased from 12.5 percent to 15 percent, Government has also increased funding for programmes aimed at helping the poor.
To cushion the increases in certain food prices, government has injected funding into targeted sectors to alleviate poverty.
A total of $137m is provided to mitigate the impacts of the VAT increase.
Permanent Secretary for Strategic Planning Peter Wise said that government is mindful about protecting the vulnerable.
“In order for government to continue funding its program it is necessary to increase VAT, at the same time government is mindful of the vulnerable and poor,” he said.
“Government has taken a targeted approach to ensure they are protected from its impact.”
Seventy million dollars has been allocated to assist the poor which is an increase of $16m.
For rural and outer islanders another $67m is provided.
A prime example is the additional $3.6m pumped into the Food Voucher Program to cater for an additional 10,000 recipients.
Beneficiaries of this assistance will include elderly people over 70 years of age who have no source of income and currently do not receive any form of Government assistance, expecting mothers and mother of young children from disadvantaged families who attend health clinics regularly, as well as children from disadvantaged families who attend rural schools.
The $10m Housing Assistance Grant Scheme to assist families to buy homes in the new Waila City Development.
Successful applicants will receive up to $10,000 to help them meet the 20 percent deposit requirement.
Rural housing assistance stands at $1m.
Divisional Development Projects like new roads and health centers that will allow improved health and market access increased from $1.5m to $5.6m.
At the same time the VAT increase will rake in $80m to meets capital costs that all work to improve the social and economic well being of the people.
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