Price hikes – a double whammy
When the increase in Value Added Tax (VAT) from 15 to 16 per cent was announced during the presentation of the Budget, it provoked much comment in political circles about the negative impact this could have on a population already burdened by rising prices. Now that the one per cent increase has kicked in, from May 1, we find the guardian of the process, the comptroller of the Inland Revenue Department (IRD), Kelvin Pompey, warning consumers to be vigilant about possible abuse by businesses that may seek to capitalize on an opportunity to hike prices on an unsuspecting populace.
The comptroller promised to have personnel from the VAT Unit and the Ministry of Trade out in the field to monitor the transition. We commend this move, even as we must recognize that this policing of prices would be a monumental task.
While the Inland Revenue Department is asking consumers to be vigilant, as it must be their responsiblility, it must also be the task of the IRD and the Ministry of Trade to publicize examples of possible price increases that may guide the buying public.
The comptroller is expressing hope that market forces of supply and demand would work to counteract possible price gouging, but one cannot always put too much faith in this process. Already, one hears of cases where items are being increased by way above a one per cent increase. In periods of transition, like the one in which we find ourselves, we cannot always be too trusting and close monitoring will indeed be necessary by the IRD and the Trade Ministry.
This VAT increase also coincides with a hike in liquefied gas products nationwide, which kicked in May 10. This double whammy is bound to have a knock-on effect in the prices being charged for products and indeed calls for a great deal of vigilance by the Ministry of Trade.
Our Back Page of this edition carries a story on this increase, which can be seen more clearly in the published chart on Page 24. But what the chart from the Ministry of Internal Trade does not show is a comparison of the old versus the new charges. The increases vary and in one instance, in Area IV, the Grenadines, there is a whopping $28 hike.
Depending on the area in which one resides, the price increases vary and, as is usual, the rural areas are naturally the hardest hit.
If ever there was a time for the voice of the consumer to be heard, it must be now. And the sitting Unity Labour Party administration must have its work cut out to reassure the population that with its nicknamed âLabour Party Gasâ rising almost in tandem with the VAT increase, things are indeed getting better. For a price increase is never great news for consumers.