During the presentation of the Budget Estimates, Prime Minister Anthony indicated that following post policy assessments and consultations with stakeholders, government was able to make further amendments to a list of items. This includes fish, butter, margarine and beans, not including lentils and pigeon peas.
Anthony reasoned that these fall under a group of items that are consumed by people with a higher income, hence the application of 15 percent VAT to the cost. However, he said there will be an exception for fish, adding that, “With respect to fish, fresh local fish will continue to be exempted from VAT as long as it is purchased from our fishers.”
VAT will also be added to salt because according to PM Anthony, it is believed to be a major cause for health problems here. Tax will only be charged to these items at stores registered to collect VAT therefore items from small community outlets will not attract VAT.
Chicken lentils, canned mackerel, canned tuna and bread will remain VAT-exempt, while milk, eggs, rice, flour, sugar, baby formula and pasta are now zero-rated.
“Zero-rating these items rather than exempting them will allow the retailer to claim back their input on these items … it should reduce the cost to consumers,” the prime minister explained.
Anthony announced that government will remove the subsidy on brown sugar, which will increase its cost per pound. The price per pound of brown sugar is currently 90 cents. It will now be $1 without the subsidy. This is a total reduction of $1-million in government subsidy.