Prices of goods to rise tomorrow
Prices on over 200 items will rise from tomorrow as Government’s new policy on the value added tax (VAT)
In his June 15 Financial Statement and Budgetary Proposals Minister of Finance Chris Sinckler announced changes to the so-called basket of goods effective September 1, 2015. The new basket contains over 150 items compared to the more than 400 in the previous list, which means that over 200 items will now attract the 17.5 per cent VAT. Sinckler said this should result in Government earning an additional $20 million in revenue during the fiscal year.
The Barbados Government Information Service (BGIS) in a release today, quoted the Minister of Finance as saying that the revised list had been carefully selected by an Inter-Ministerial Committee following “intense” discussions over a nine-month period to reflect “a more affordable, healthy and better targeted” VAT-free basket of goods.
“Government has ensured that foods of high nutritional value which reflect the needs of the average Barbadian have remained in this basket. For every item that has been taken out, a nutritious equivalent substitute remains in the basket. This was an important recommendation of the Committee as it strongly believed that the changes should not negatively impact the health of Barbadians,” it quote Sinckler as saying.
The minister explained that from the inception of VAT in 1997, a basket of basic food items was included to “give relief, especially to the poor and vulnerable” who were likely to be more negatively impacted by the tax.
The release stated that when a qualitative and quantitative in-depth analysis of the various tariffs was conducted by officials of the Inter-Ministerial Committee from Finance and Economic Affairs, the Barbados Revenue Authority, Commerce, Agriculture, Health and Social Care, it was discovered that some of those items could not be legitimately classified as basic.
“We ended up with a basket of goods with a lot more sophisticated things than would have been described as basic. In other words, we ended up with over 400 items and that was because of a particular challenge that occurred in relation to the disaggregation of the tariff headings, which apparently did not take place. Whole tariff headings were copied into the basket and therefore items that were not originally intended to be in the basket got in there,” the minister said.
According to the BGIS, some of the items included in the amended list include cane sugar, wheat or mueslin flour, brown and white rice, fresh fruit, dried legumes, pasta, chow mein, fresh or dried citrus fruit, vegetables, potatoes, chicken and various types of fish.
Earlier this month Cost U Less put shoppers on notice of impending price increases as a result of the June 15 budget announcement.
Notices placed in the snack isle of the bulk retailer at Welches Walk, St Thomas store said that in compliance with Government regulations, “beginning September 1st, 2015, new Value Added Tax of 17.5 per cent will be added to hundreds of items”.
Store manager Joe Lachausse told Barbados TODAY then that the move was in response to the change of items in the basket of goods.
“That one is upcoming to the changes to the basket they are allowing . . . that will include hundreds of items,” Lachausse said, explaining that the list was as lengthy as it was because of the classification of some products “which means it may say one thing but it applies to multiple different [items]”.
Asked at the time whether he anticipated that the increased prices would affect shopping at the warehouse club-type shopping facility, the store manager said it was “to be determined”. (BGIS)