Shoppers doubtful about VAT savings

The manager of a Port-of-Spain branch of Hi-Lo says the removal of Value Added Tax (VAT) from certain food items proposed by Government will not have much effect on the average family’s monthly food basket. The manager, who prefered not to be named, said the VAT removal, which is scheduled to take effect in November, would take only “a few cents” off the cost of items. He said an average shopper spent between $1,200 and $1,500 per week. He added that it was extremely unclear what qualified as a luxury item. 

When the T&T Guardian visited Hi-Lo yesterday, most consumers agreed that the VAT removal would not have any significant effect on their grocery bills. Irma Nixon, of Belmont, said she spends more than $4,000 a month on food for her family of four. Nixon expressed a lack of faith that this costly bill would decrease any time soon. 

 

 

“It’s not going to make a difference because they (Government) giving one thing and taking back in another,” she said. She added that the announced gradual reduction of the fuel subsidy was evidence of this. The manager said almost everything in the supermarket was already zero-rated, such as staple items like rice, flour, sugar, fruits and vegetables and dairy products. He believed that items that could possibly have VAT removed included canned goods, soft drinks, juices and various snacks. At Hi-Lo, the in-store goods are approximately 50 per cent imported goods and 50 per cent local. The manager said imported goods were more expensive owing to customs duties and surcharges in addition to VAT. However, he said consumers buy what they can afford and that local and imported goods sold at the same rate.  

 

 

One customer, who requested anonymity, said since food prices were already high, she did not see how removing VAT would be effective. She told the T&T Guardian she spends nearly $1,000 a week on groceries, mainly basic items, for a family of three. Another customer, said food prices fluctuate every month and therefore the VAT removal would not result in sustainable savings to her family. 

There was one customer, however, who said VAT should be removed as soon as possible. Pearl Lutchman, of Woodbrook, said she expected her more-than-$4,000 monthly grocery bill to decrease by at least 25 per cent when VAT was removed on food items in November. A look at the food basket at Hi-Lo supermarket on French Street in Woodbrook yesterday determined that most of the staple items found at supermarkets are already zero-rated. A basic food basket including both zero-rated items and items which incur VAT costs approximately $272. With the removal of VAT, the total cost of the same items would be approximately $244.