NAR, UNC first removed VAT from food; PP list includes 7,000 items

PM Kamla Persad-Bissessar went "shopping" Thursday at Xtra Foods Supermarket in the Grand Bazaar shopping plaza. The purpose of the visit was to review and appraise the process of purchasing food items that have been VAT exempted as announced by the Government in its Budget Statement 2012/2013 in Parliament.

Prime Minister Kamla Persad-Bissessar reported to Parliament Friday that the People’s Partnership Government has removed VAT on thousands of items by Legal Notice 365 of 2012. 

And she gave legislators some historical perspective on the removal of the tax from food items, which started with the National Alliance For Reconstruction (NAR) government, which introduced VAT:

The NAR government removed VAT from bread, rice, flour and milk in 1989, she noted. And in 1996 the UNC government dropped the VAT from cheese and pasta. In addition, she said the UNC government zero-rated approximately twenty (20) items by Act No. 8 of 1996. 

These included corned beef, curry, fresh butter, peanut butter, table salt, salted butter, tinned sardines, smoke herring, yeast, baking powder and saltfish.

"Our decision to remove Value Added Tax on an expanded list of items was a strategic decision, in keeping with our Government’s focus," she told legislators.

"It represented a catalytic step in the reduction of food price inflation and an improvement in the standard of living of many in our society and adequately identifies with the 2012-2013 Budget theme of ‘Stimulating Growth and Generating Prosperity’ for the people of Trinidad and Tobago."

She noted that the list of items was drawn up after consultations with a multi-disciplinary group that included representatives of: 

• the Supermarkets Association of Trinidad and Tobago (SATT)
• Food Distributors Association
• Trinidad and Tobago Manufacturers’ Association (TTMA)
• Trinidad and Tobago Chamber of Industry and Commerce (TTCIC)
• Consumer Affairs Division, Ministry of Legal Affairs
• Customs and Excise Division
• Board of Inland Revenue
• the Chief Parliamentary Counsel of the Ministry of Finance and the Economy 

The process was led by Vasant Bharath, Minister of Trade, Industry and Investment and Minister in the Ministry of Finance and the Economy. 

Helping consumers. The Xtra Foods personnel shows the before and after price to reflect the removat on the VAT

Persad-Bissessar said the expanded list consists of approximately 250 tariff lines, which correspond to thousands of Supermarket Units (SKUs). She added, "we now have the following broad groups of items vat free, numbering well over seven thousand (7,000)." They include: 

1. all cereals
2. all sausages
3. all juices 
4. artificial sweeteners
5. baby food 
6. bacon 
7. banana chips 
8. barbecue sauce 
9. all biscuits and cookies 
10. black eyed peas 
11. cake mixes 
12. chick peas 
13. chicken nuggets 
14. cocoa mix 
15. coconut milk 
16. creams and creamers 
17. dates 
18. french fries 
19. fruit cocktail 
20. fruit punch 
21. garlic sauce 
22. jams and jellies 
23. lentils 
24. mayonnaise 
25. oats 
26. peanuts 
27. pepper sauce 
28. picnic ham 
29. pigeon peas 
30. pineapple slices 
31. pink salmon 
32. plantain chips 
33. prunes 
34. red beans 
35. salad dressing 
36. shortening 
37. soups 
38. soy milk 
39. teas 
40. turkey 
41. wafers 
42. waffles 
43. yogurt 

Persad-Bissessar said, "Our second pillar for sustainable development focuses on ‘Poverty Eradication and Social Justice’. As a result, our governance structure seeks to provide the basics by focusing on the needs of the people first.

"This is what the removal of VAT accomplishes!"

Read Commentary: A question about VAT