Friday, February 23, 2018

Govt makes 'VAT-free' checks at supermarkets

TWENTY officers of the Prices Council are currently checking on supermarkets whether they had removed Valued Added Tax (VAT) according to the zero-rated VAT food list, reported Trade Minister Vasant Bharath.

"Although the Prices Council is not able to enforce the fact that prices should change the fact is that they use moral suasion by printing prices to show the population the differences between pricing between supermarkets and then the rest is left to the consumer and the market place," he said.

He noted there was another avenue through the Fair Trade Commission but the legislation needed to be proclaimed and it needed to be "stocked" with commissioners. He added that he planned to start this process next week.

He noted a very aggressive communication campaign had been launched by the Supermarkets Association, his Ministry, Ministry of Legal Affairs and the Prices Council to alert the population about items now zero-rated and supermarkets that have carried out the necessary reduction.

"I think the market will regulate itself," he commented.

He was the feature speaker yesterday at a breakfast meeting hosted by the Chamber of Industry and Commerce, Westmoorings.

A member of the management committee for the Chamber's Tobago division, who asked not to be named, said with the removal of VAT there were a number of businesses with "serious stock" but "nobody studying what is going to happen with the VAT return from that stock".

She questioned whether the VAT office and the Board of Inland Revenue have been instructed and given funds of hundreds of millions of dollars to reimburse people within the next period so that they do not end up in cash flow problems. She noted that there were people with a warehouse full of stock that is VATable but must now be sold without VAT.

Bharath said he understands there will be an issue related to the cost of people who paid VAT on items which they would no longer be able to offset on their sales, which generally provides relief to a number of businesses.

He reported that he had several discussions with Finance Minister Larry Howai regarding the repayment of VAT on a timely basis.