The government plans to removed VAT from about 7,000 items in order to make food items more affordable for consumers. Finance Minister Larry Howai has said it's a temporary measure to help stabilise food prices and deal with high food inflation.
Bharath has corroborated that. However Food Production Minister Devant Maharaj was quoted in the local media Friday as saying that VAT won't be reintroduced.
Bharath has corroborated that. However Food Production Minister Devant Maharaj was quoted in the local media Friday as saying that VAT won't be reintroduced.
Commenting on the loss of revenue, Bharath told local media that Government would make budgetary adjustments within the state enterprises to cope. He confirmed the quantum of loss when he addressed reporters at Thursday's post cabinet media briefing.
"We believe from our initial calculations that amounts to a reduction of approximately $400 million as far as revenue is concerned that we would have otherwise have earned from that VAT," Bharath stated.
"It is quite a significant reduction that will redound to the people of Trinidad and Tobago," he added. He confirmed that the removal of VAT is not permanent. "It was always an interim measure, once we are able to control food inflation then we will re-look at the possibility of the reinstatement of VAT on those items," he said. "But it is not likely to be in the near future," he added.
Bharath disagreed with the views of some economists and commentators who has stated that the removal of VAT may could have a negative effect.
"In fact it will be lowering the food import bill by lowering it by 15 per cent. It's not going to add to the food import bill," he said.
He also explained that the Prices Control Council would monitor prices to ensure that consumers are protected from potential gouging. A cross-ministerial team will make recommendations to cabinet to regulate prices at the major grocery chains to ensure no retailer attempts to undermine the VAT removal, he said. The group has already met with key stakeholders and will continue meeting until the implementation.
"We believe that the market itself with regulate where consumers will shop," he said.
"It is quite a significant reduction that will redound to the people of Trinidad and Tobago," he added. He confirmed that the removal of VAT is not permanent. "It was always an interim measure, once we are able to control food inflation then we will re-look at the possibility of the reinstatement of VAT on those items," he said. "But it is not likely to be in the near future," he added.
Bharath disagreed with the views of some economists and commentators who has stated that the removal of VAT may could have a negative effect.
"In fact it will be lowering the food import bill by lowering it by 15 per cent. It's not going to add to the food import bill," he said.
He also explained that the Prices Control Council would monitor prices to ensure that consumers are protected from potential gouging. A cross-ministerial team will make recommendations to cabinet to regulate prices at the major grocery chains to ensure no retailer attempts to undermine the VAT removal, he said. The group has already met with key stakeholders and will continue meeting until the implementation.
"We believe that the market itself with regulate where consumers will shop," he said.
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