Although the government announced a list of food products that would be zero-rated effective November 1, that does not mean the items would be exempt from price increases.
Trinidad and Tobago Supermarket Association President Rajiv Diptee said external price shocks in the food and retail sector have affected the supply and demand equation that the sector has not been able to balance.
Speaking at the association’s virtual post-budget forum on Tuesday night, he said that although consumers have more staple foods on the zero-rated list, the announcement meant a removal of the 12.5 tax. percent, but this does not affect the costs incurred by importers to import the item.
Diptee said: “TT supermarkets and net food importers are price takers, not price fixers. As long as we don’t make something, or manufacture something, or grow something, we are going to import into it, and this is very important to note, because this is where the demand for foreign currency continues to grow. linger.
Asked more about price increases, he explained that value added tax (VAT) falls within the purview of the government and market economy forces on a global scale, as it relates to the demand and supply, dictate the price of the product that domestic importers must pay.
“We have to buy it at the source which is from foreign companies at the price they have to get for the good. We have absolutely no control over this price. TT are source price takers, ”Diptee said.
He explained that importers and distributors globally have been unable to balance demand and supply, which has created global shortages.
Currency challenges, increased transportation and shipping costs and the ease of doing business due to the fallout from the covid19 pandemic, Diptee reiterated, continued to be major constraints in operations. .
“In the shipping lanes as they are today, the cost of a container in the pre-covid environment was almost US $ 3,000 in October 2019, fast forward to today and we are paying close to US $ 15,000 US $ 16,000, US $ 17,000 for a freight container, regardless of the contents of the container.
“It has affected not only supermarkets, but all containerized forms of goods being transported and, indeed, TT is a net importer of not just food, but a lot of things.”
On Monday, Finance Minister Colm Imbert announced in his 2021/2022 budget that cookies, cooking oil, canned vegetables, fish and meat, cornflakes, curry, juice, sausages and ham, ketchup, bottled water and mat would be exempt from VAT.
Diptee said he was awaiting further clarification on the list because some of the items (corned beef, curry, sardines and smoked herring) were already zero-rated, as noted in section 8 (2016), Schedule 2 of the Law on value added tax.
He also added that these were proper classifications of the articles, as what was listed on Monday was a generalization.
“We have seen the elimination of VAT on these items, these items which were zero-rated have now moved to the zero-rated category. On the basis of generalization, because it is not a specific classification, what exactly are we getting into? So we hope to get revisions of this? “
The SATT added that the following items were now subject to VAT as of Monday: tenderloin, sirloin, frog legs, salmon, halibut, plaice, trout, sea bass, lobster, crayfish, flatfish, shrimp and shrimp, walnuts. ‘arec.
Fruits subject to VAT include pears, quinces, apricots, sour cherries, strawberries, black / white / red currants, peaches, nectarines, kiwis, durians, persimmons, strawberries, raspberries , blackberries, blackberries, Logan’s blackberries, gooseberries, cranberries and blueberries.