Gail Alexan­der

Scores of food items will from to­day no longer at­tract the 12.5 per cent Val­ue Added Tax (VAT) as the Bud­get mea­sure to give ef­fect to this kicks in.

The re­moval comes at a time when cus­tomers are al­ready faced with ris­ing food prices as a re­sult of the glob­al sup­ply chain block­ages.

Head of the Ship­ping As­so­ci­a­tion Hay­den Al­leyne has not­ed con­tin­u­ing over­seas ship­ping is­sues caus­ing de­lays and in­evitably hik­ing costs.

Al­leyne said while the re­moval of VAT on some items will give peo­ple a lit­tle more dis­pos­able in­come as they may be pay­ing less on some es­sen­tials, the oth­er side of the equa­tion is peo­ple’s abil­i­ty to buy and the ris­ing cost of com­modi­ties.

“So VAT re­moval will give some ease but not to the ex­tent that it will erad­i­cate all prob­lems. The is­sues we’re fac­ing with the over­seas mat­ters of get­ting goods to T&T are caus­ing ris­ing costs. And this con­ver­sa­tion af­fect­ing ship­ping will go on for some time.’’

“The cost of get­ting things to you from out­side is go­ing up,” he not­ed.

The sit­u­a­tion is par­tic­u­lar­ly af­fect­ed where items from Chi­na are con­cerned. He said it was a big is­sue in the US ref­er­enced even by Pres­i­dent Joe Biden when 60 ships were wait­ing off Los An­ge­les with goods.

He al­so not­ed the in­ter­na­tion­al short­age of truck­ers to trans­port goods, fac­to­ry is­sues and slow pro­duc­tion of items in­clud­ing cars.

“These is­sues will ob­vi­ous­ly have trick­le down ef­fects and raise the price of goods in­clud­ing food.”

“Then there’s a spe­cif­ic is­sue for T&T, since these costs are paid in US dol­lars, we have the prob­lem here of peo­ple sourc­ing (for­eign ex­change) for pay­ments.”

In the 2022 Bud­get’s pack­age of fis­cal mea­sures, the on­ly item be­gin­ning to­day is the re­moval of VAT on about 65 food items.

This in­cludes lunch meats, bot­tled wa­ter, ghee, roti skins, geera, saf­fron, turmer­ic, ham slices, sala­mi, bologna, tea, al­mond milk, oil. Oth­er fis­cal mea­sures be­gin from Jan­u­ary 2022.

Trade Min­is­ter Paula Gopee-Scoon will to­day vis­it sev­er­al su­per­mar­kets to see their lev­el of com­pli­ance in re­mov­ing VAT from the items.

Con­sumers fear lit­tle re­duc­tions

While some con­sumers are look­ing for­ward to to­day’s VAT re­duc­tion mak­ing some foods more af­ford­able in gro­ceries, they were doubt­ful they would see any re­duc­tion in prices of meals at eat­ing places.

“Who in Trinidad or To­ba­go drop­ping prices on any­thing these days? Even with the VAT gone from the things they have to use,” asked a cus­tomer in San Fer­nan­do.

“And we still have to won­der if all gro­ceries will re­move the VAT too.”

Some con­sumers at JTA in Mara­bel­la on Sat­ur­day said the re­moval of VAT on the items may not go enough of a way to re­duce food bills. They point­ed out that it would not as­sist peo­ple who can­not use some of those items.”

“Pig­tail nice to flavour dish­es, but the re­moval of VAT and mak­ing it cheap­er might make peo­ple overuse it and wors­en their cho­les­terol prob­lems.”

“Gov­ern­ment al­ready know T&T has a high rate of cas­es with heart dis­ease, di­a­betes and blood pres­sure. Why they couldn’t re­move VAT on some chick­en parts?”

They al­so ex­pressed con­cern about the VAT ex­empt­ed lunch meats be­cause of long­stand­ing med­ical con­cerns about the dan­gers of cer­tain preser­v­a­tives.

At Massy, Wood­brook, one con­sumer al­so felt, the pub­lic could have al­so been bet­ter served by re­mov­ing VAT on some health­i­er foods.

“They take VAT off on some things that pop­u­lar. But the rea­son T&T have this big prob­lem with heart prob­lems and ‘sug­ar’ - which the (Health) Min­istry telling us doesn’t help if you get COVID 19—is be­cause peo­ple like to buy pop­u­lar or cheap­er items.‘’

UNC: VAT re­moval no Di­vali gift

Mean­while, Op­po­si­tion Mem­ber of Par­lia­ment for Oropouche West, Dave Tan­coo, who is the par­ty’s fi­nance spokesper­son, said yes­ter­day that the re­moval of Val­ue Added Tax (VAT) from some food items from to­day—like roti skins and ghee—was no “Di­vali gift” since peo­ple were al­ready been warned that food prices will go up.

Tan­coo not­ed the prox­im­i­ty of the re­moval to Thurs­day’s Di­vali hol­i­day and the fact no oth­er fis­cal mea­sures be­gin to­day.

He added, “VAT re­moval on those food items may have come around Di­vali time, but it’s def­i­nite­ly no Di­vali ‘gift’ since Gov­ern­ment had sub­se­quent­ly warned of high­er food prices.”

“And that’s some­thing every­body who buys food knows well will be hap­pen­ing even if there was no warn­ing. Re­mov­ing VAT from these items was sim­ply ma­m­aguy as usu­al for PNM. But with some­thing as ba­sic food, much more needs to be done to en­sure peo­ple—many of whom are on forced pan­dem­ic bud­get­ing—can get what they need.’’

“T&T is in a sec­ond pan­dem­ic year. There must be plan­ning and fore­sight to deal with what’s need­ed so the econ­o­my can roll. Piece­meal mea­sures here and there won’t make a dent in peo­ple’s bills, es­pe­cial­ly with high­er util­i­ty rates and prop­er­ty tax ahead.”