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Lecturer—Govt should remove VAT from raw materials

Reshma Ragoonath
Published: 
Tuesday, October 9, 2012

 

University of Trinidad and Tobago lecturer Dr Rohanie Maharaj says it would have been more prudent to remove Value Added Tax (VAT) on raw materials used by local manufacturers, rather than limit it to food items. She said local manufacturers would be placed at a disadvantage when the VAT removal is implemented from November 15.
 
Maharaj, who spoke yesterday at the UTT’s response to the 2012/2013 budget forum at the South Campus of the National Academy for Performing Arts, said the removal of VAT would reduce food prices in the short term. However, “It probably would have been prudent to be selective on VAT so you do not put stress on local manufacturing. For example (Government) could have removed VAT on the local raw-material component for manufacturing. You have to pay VAT on that and take it away from the locally manufactured goods,” she said. 
 
The forum was attended by students of Naparima Boys College, St Benedict’s College and the other schools. It featured presentations from senior lecturers at UTT. Maharaj urged Government to exercise caution in removing VAT on some foreign food items. She said Government should consider looking at taking VAT off the raw-material components that go into manufacturing and local food products, “because at the end of the day the local people will be at a disadvantage in terms of their manufacturing. So we have got to broaden this thing and focus a little more on what are the benefits to local manufacturing.”
 
Maharaj said there was need to better understand how the benefits of VAT removal would benefit the agriculture and the agro-processing sector. The lecturer said the removal of VAT raised the question of whether the benefits would be passed on to consumers. “You have to monitor that,” she said.
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