Even if there is an increase in food prices as far as imported goods are concerned, at least consumers will not have the added burden of a 15 per cent value added tax (VAT) to their grocery bills.
That was the view yesterday of Trade Minister Vasant Bharath, who spoke to reporters at the Hyatt Regency hotel, Port of Spain.
He said the government will therefore still essentially have reduced the cost of living to citizens by removing VAT on certain food items.
He added that it was expected the government will forego $400 million in lost VAT revenue, but believed it will be money well spent to support the cost of living for the population.
On Monday the Central Bank forecast of a 2.5 per cent one-off reduction in food prices as VAT is removed, but as market forces take effect, prices will still continue to rise.
Bharath defended the government's cost-cutting measure, saying that the new VAT-free list compiled by the ministry and enacted on November 15, contains thousands of items that will benefit the consumer
He maintained what was needed was constant vigilance by consumers and government watchdog agencies to monitor retailers for indiscriminate price increases.
"What we need to do is closely monitor supermarkets. We also need to make sure importers are not raising prices to retailers, because if entrepreneurs believe they can raise prices to take advantage because the market can bear it then they will do so. It comes down now to the monitoring of the Prices Council of the Legal Affairs Ministry's Consumers Division to ensure consumers are aware prices have gone down," he said.
He added consumers can also call the VAT monitoring hotline, 625 4VAT, to complain of unjustified increases.
"This is a situation where consumers must stand up for themselves. The government can't monitor every single supermarket," he said. —Carla Bridglal