Even though the revised Value Added Tax (VAT) list is to be released today during the debate of the Finance Bill 2016, president of the Supermarket Association of T&T (SATT) Dr Yunus Ibrahim said members of SATT were not consulted about what items should return to the list.
He said when the list is released today, he would be seeing it for the first time just like the other members of the public, but his membership stands ready to make the changes which take effect on February 1.
In mid-November 2012, the then government led by Kamla Persad-Bissessar had announced that VAT would be removed from 7,000 grocery items.
She had said the removal of VAT on those items would ease the burden on consumers’ pockets from continuous rises in prices.
During the budget debate in early October 2015, Finance Minister Colm Imbert had announced that VAT would be reduced to 12.5 per cent.
He said the government wanted to improve efficiency and to broaden the base, by reviewing and adjusting exemptions and zero-rated items “which are associated with non-essential or luxury items, and which are not critically important to the livelihoods and basic cost of living of our citizens.
“And consistent with our 2015 manifesto promises, I propose to reduce the VAT rate from 15 per cent to 12.5 per cent.”
In its January 8 statement the Ministry of Finance said the Finance Bill of 2016, will be presented in Parliament today and included in the Bill would be the proposed amendments to Schedule II of the VAT Act 75:06.
“This list will be released once it has been laid in Parliament. The reduction in the rate of VAT to 12.5 per cent and the changes to the range of items, subject of VAT will become effective February 1, 2016.” The list was originally scheduled to be released on January 8.
In a telephone interview with the Guardian yesterday, Ibrahim said the month-end period was usually the busiest time of the month for supermarkets to do the changes, and doing so for a large number items was going to be challenging.
The list becomes effective in February. He says it’s more than a question of how long the phase-in period is—it’s a question of timing.
“January 11 for the list being posted is more than sufficient time we need to do our background work. We are happy with the timespan”, he said, (but) the reality is that even if we have the list beforehand you still must have a period where you are going to lower the VAT and include the new figures, the new items and whatever tweeks there may be,” he said.
Ibrahim said labelling was a challenge which comes with the timing of the introduction of price increases as this may mean that supermarkets may have to employ workers on extra, overnight shifts.
“The only problem that we are foreseeing is labelling because according to law you must advertise your price inclusive of VAT. It is going to be a re-tagging of the current items and re-tagging of the old items.”
He said the label can only be printed subsequent to price changes therefore, “we have to effect the VAT and then make changes.”