Geisha Kow­lessar

Thou­sands of con­sumers who ex­pect their pock­ets to be eased to­day with the re­moval of the 15 per cent Val­ue Added Tax (VAT) will feel on­ly some mea­sure of re­lief, as there will not be to­tal com­pli­ance. Dis­trib­u­tors and su­per­mar­kets have been work­ing round the clock to make the nec­es­sary ad­just­ments, chair­man of the Food Dis­tri­b­u­tion As­so­ci­a­tion Marc Mout­tet said yes­ter­day.

In Sep­tem­ber, Prime Min­is­ter Kam­la Per­sad-Bisses­sar an­nounced at a pre-bud­get ral­ly that from to­day, the VAT on thou­sands of food items (ex­clud­ing al­co­hol and "lux­u­ry goods") would be re­moved in an ef­fort to low­er food prices and curb food-price in­fla­tion.

Mout­tet said al­though all stake­hold­ers gave the com­mit­ment that prices would be changed, it was "vir­tu­al­ly im­pos­si­ble" to make all the ad­just­ments with­in mere hours, and there­fore con­sumers should not ex­pect to­tal price re­duc­tion to­day. For the greater part of yes­ter­day, stake­hold­ers in the food in­dus­try were locked in a meet­ing fine-tun­ing in­ter­pre­ta­tions of the VAT-free list.

Those who at­tend­ed in­clud­ed Trade and In­dus­try Min­is­ter Vas­ant Bharath, mem­bers of the min­istry's le­gal team, Ver­non Per­sad, pres­i­dent of the Su­per­mar­kets As­so­ci­a­tion and Mout­tet. "Every­thing is in place and every­one is on board to tak­ing off VAT from the spec­i­fied items," Mout­tet said.

"But we must warn there will not be full com­pli­ance to­day, be­cause there will be some im­ped­ing is­sues...there is no doubt there will be some teething is­sues, be­cause a task of this mag­ni­tude is not done seam­less­ly. "It is a huge man­u­al task to change the prices...There is still a sig­nif­i­cant amount of work to be done man­u­al­ly to change price tags."

He as­sured, how­ev­er, that dis­trib­u­tors and su­per­mar­ket own­ers were work­ing round the clock to en­sure the changes take place to ben­e­fit con­sumers as soon as pos­si­ble. "Through­out the day to­day, the re­moval of VAT will con­tin­ue to take place...This will not de­ter us from get­ting the job done," Mout­tet added.

He said there were slow Di­vali sales at many su­per­mar­kets as cus­tomers were anx­ious­ly wait­ing for the VAT-free list to be put in­to ef­fect be­fore re­stock­ing their cup­boards. Some su­per­mar­kets al­so closed ear­ly yes­ter­day to fa­cil­i­tate the process, and staff were al­so ex­pect­ed to work well in­to late af­ter­noon to­day to speed up the process, Per­sad said.

Say­ing that every ef­fort was be­ing made to change as many prices as pos­si­ble, he added, "We are giv­ing this our best shot and I guar­an­tee cus­tomers would be hap­py to­mor­row (to­day) when they walk in­to the su­per­mar­kets. "But it is go­ing to take some time, es­pe­cial­ly in the larg­er su­per­mar­kets, where they are faced with the task of chang­ing at least 10,000 items."

He said yes­ter­day's meet­ing with stake­hold­ers was aimed at clar­i­fy­ing "am­bigu­ous de­scrip­tions" of some of the items on the list, as changes must be made across the board and by all VAT-reg­is­tered out­lets. "Af­ter the prices have been changed we then have to do cross-checks to en­sure no mis­takes are made, and that as well take time."

Restau­rants: Don't ex­pect cheap­er food

The re­moval of VAT would have no im­pact on the op­er­a­tions of restau­rants, as food prices at those places would re­main the same, Has­sel Thom, pres­i­dent of the Trinidad Ho­tels, Restau­rant and Tourism As­so­ci­a­tion, said yes­ter­day.

He said restau­rants which were VAT-reg­is­tered would not ben­e­fit from the mea­sure.

"While VAT has been re­moved from non-lux­u­ry-termed food items, which may ben­e­fit the man in the street, this will not nec­es­sar­i­ly re­duce the cost of a meal in a restau­rant, or oth­er food and bev­er­age op­er­a­tions that are VAT-reg­is­tered, bear­ing in mind that to con­vert the non-VAT­able raw ma­te­r­i­al to a fin­ished meal (re­quires) the use of elec­tric­i­ty and wa­ter (both VAT­able com­modi­ties), with oth­er raw ma­te­r­i­al that has been classed as lux­u­ry items.

This process in it­self con­verts the fin­ished prod­uct to a VAT­able com­mod­i­ty," Thom said.

Ap­sara Restau­rant on Queen's Park East, Port-of-Spain, was one of sev­er­al restau­rants still to de­cide how the ini­tia­tive would af­fect its busi­ness. Asked if cus­tomers could ex­pect low­er prices on meals, one man­ag­er said yes­ter­day no di­rec­tive had been giv­en whether or not prices should be changed.