The Ministry of Finance released a list of approximately 45 VAT-free food items that was announced during the 2021/2022 Budget presentation to come into effect on November 1.
With the removal of the 12.5 per cent VAT on these items, consumers will likely save between 30 cents on items such as a bottle of water to $8 on the purchase of certain brands of butter, to as much as $22 off on Pure Ghee.
On concerns from some consumers that supermarkets will arbitrarily hike prices with the removal of VAT on a range of basic items, President of the Supermarket Association of T&T Rajiv Diptee said the competitive landscape of retail in T&T was fierce and "consumers will be able to detect price discrimination very easily and (can) shop elsewhere."
The stores themselves are "the calibrating mechanism in the market for checks and balances," he added, while social media provides another layer of scrutiny where the unscrupulous elements are highlighted.
Diptee, added, however, "Once you aren't manufacturing a good, making it, processing it, you have to purchase it at the source which is from foreign companies at the price they have to fetch for the good. That price we have absolutely no control over. T&T are price takers at the source.
"The VAT is within the remit of the Government and free-market economy forces globally where demand and supply are concerned dictates the price of the product domestic importers have to pay."
Here is a sample of food items and prices that are currently subject to VAT from Food Basket Supermarket, Mt Hope, on Thursday. The price with VAT removed is also included.
Price with VAT and Price with VAT removed from November 1
Nariel coconut oil 500ml $23.95 $20.95
Canola oil 500ml $27.45 $24.00
Pure Ghee Cow Brand 2kg $179.95 $157.45
Peanut butter Matouk's 500g $19.45 $17
Black pepper Top Chef 24g $4.45 $3.89
Parsley Top Chef 5g $4.95 $4.33
Cereal Nestle Corn 405g $27.95 $24.45
Kid’s cereal Cap'N Crunch 370g $31.95 $27.95
Oats Quick Oats 1kg $16 $14.00
Condensed milk Eve 390g $8.95 $7.83
Instant coffee Nescafe 100g $35.45 $31.00
Ground Coffee Jose Perez 185g $16.95 $14.83
Steel-cut oats Roland 680g $25.95 $22.70
Green tea Lipton 20 bags 28g $25.97 $22.72
Orange juice Orchard calcium 1l $18.45 $16.14
Apple juice Orchard 1l $10.95 $9.58
Bottled water Blue Waters 650ml $2.45 $2.14
Hot dogs Saara 340g $12.95 $11.33
Vienna sausages140g Grace $7.45 $6.51
Canned tuna Blue Pacific 140g $13.95 $12.20
Canned mackerel 425g Grace $15.45 $13.51
Canned black-eyed peas Mabel 442g $5.95 $5.20
Canned kidney beans 440g MP $6.95 $6.08
Canned corn 340g Bess $7.45 $6.51
Canned mixed vegetables Matouk's 425g $10.95 $9.58
Mayonnaise 375g Mabel $12.95 $11.33
Ketchup 750ml Mabel's $7.95 $6.95
Roti skin (4 pack) Excellent Choice $23 $20.12
Soup (packaged) 60g Gurumi $4.95 $4.33
Soya chunks 230g Regal $10.95 $9.58
Dhal 2lb $11.95 $10.45
Cheese slices Emborg 200g $19.95 $17.45
Butter 500g Emerald $58.45 $51.14
Turkey ham slices 150g Erin Farm $13.95 $12.20
Turkey salami 200g Blue Ribbon $15.45 $13.50
Bologna chicken 200g Saara $10.95 $9.58
Biscuits Crix tri-pack 96g $15.95 $13.95
Crackers Munchy's vege crackers 390g $19.95 $17.45
(All brands of soya bean oil and olive oil were sold out.)
People speak out
Customers at the supermarket were asked for their opinion on the impending removal of VAT on the food items.
Anisa Frederick, Champs Fleurs:
"Even if they remove VAT from the items, supermarkets could still increase the price on the products. That doesn't really change anything. The economy is not doing so well because of the coronavirus, we're expecting everything to increase in price. It's going to be very hurtful on our pockets, but there's nothing we could really do."
Kate Williams, Port-of-Spain:
"It's $10 for this Blue Band butter right now, some places may have it for $8 but we still have to share...Some prices may rise, we have to be honest. They would say they removed VAT and I would not see that. Do it and let the consumers benefit. If the price on something went down and there's a special on it; carry it down. Give people something..."
Henry Alexander, Mt Hope:
"I haven't shopped in a while, about a month. However, the people I talked to have indicated that prices generally have gone up more steeply than they would have anticipated and maybe even more than what the economists are saying. Maybe there is something else in the mix that laypeople aren't getting.
Personally, I found this supermarket their prices are generally lower than in other places and stable.
I do small business consulting, you would have people who need inputs of raw materials. As a consequence, they're having serious challenges because you can't compete with the more established brands when they have economies of scale. For them, it's stress for small businesses and people with fixed incomes."