BASSETERRE, St. Kitts – THE recent announcement by Trinidad and Tobago Prime Minister Kamla Persad-Bissessar that she would be removing VAT from food in the country has been greeted with shouts of joy, but some question the move as VAT is one of the government’s main revenue sources.
Prime Minister Bissessar made the announcement while at a People’s Partnership rally in Chaguanas on the evening of Saturday, September 29, 2012.
The Trinidad and Tobago Newsday reports that the PM said the removal of the VAT from food items would take effect on November 15, 2012 and is part of her government’s plan to reduce food prices.
The media house reported that PM Persad-Bissessar noted that all food items attract 15 percent VAT with the exception of 59 of them which were “zero rated”. And when the change is implemented however, “No luxury items will be zero rated, such as caviar, champagne, and no alcoholic beverages…”
Meanwhile, Vernan Baptiste – a chartered accountant who partners at Bertram Hadaway and Company - has expressed concern over the move.
His concerns include the Board of Island Revenue’s (BIR) possible problems with implementing the initiative, especially seeing that it has experienced problems with zero-rated items under the ASYCUDA system ((Automated System for Customs Data).
In April of this year, former Political Leader of the People’s Action Movement (PAM) Lindsay Grant had promised that should his party be elected to power, they would remove VAT from all food items in St. Kitts-Nevis.
The Trinidad Express noted that aside from energy, Value Added Tax is the government’s second major source of revenue generation. And Baptiste questioned how the government was going to satisfy its budget with that particular avenue of revenue being closed.
