Comptroller of Inland Revenue expects smooth transition
On Wednesday, Pompey said that in keeping with the pronouncement of the Minister of Finance and Prime Minister Dr Ralph Gonsalves in the 2017 budget presentation, the standard rate for VAT will increase by one per cent across the board and most business are ready for the changeover.
He said that the VAT Unit has been working along with various businesses, especially those in the retail merchandising sector, supermarkets and large retail stores, because they recognize that these businesses are the ones who would have most of the problems in terms of changes in prices and conversion.
Pompey said that most of the businesses have said that their electronic systems would be adjusted to record the right prices and there will be no problem changing the 15 per cent over to 16 per cent.
However, there are some businesses that are still pricing each individual item on the shelf and Pompey said that these businesses are going to have a bit of a challenge, because it means that between the close of business on Saturday, April 29 and Monday, May 1, they will have to remove all the individually priced items and replace them with the new VAT inclusive prices.
“Those businesses who have the price on the shelf next to items, its easier, because they just have to change that one sticker price and so we have been working and giving businesses the necessary advice and guidance,â said Pompey, who revealed that the transitioning period is being spearheaded by a team of about eight persons from the VAT Unit, who have been out in the field during the last several weeks.
“We are getting a good response in general. We do have instances where we had a few problems, but generally, we do have good compliance in terms of persons working along with the department,â noted Pompey.
Among the items that have been added to the VAT list are rice, whole chicken, chicken back and other chicken parts, butter, brown sugar, lentil peas, pigeon peas, salt, yeast, baking powder, cooking oils and shortenings.
The Government is expected to yield about EC$10 million per annum as a result of the increase.
Also, the VAT rate for accommodation and other tourism related activities will move from 10 per cent to
11 per cent, while the rate of VAT for rental of a berth in any marina or shipyard will be reduced from the standard 16 per cent to 11 per cent. The VAT charged on bio-degradable packaging and food containers will be removed.