The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s owner says the Value-Added Tax (VAT) Unit and Price Control are “on a collision course”, and fears his business will be caught “in the middle”.

Rupert Roberts told Tribune Business that the two Government agencies were seeking “two different things” when it came to product pricing, exposing the supermarket chain to “violations” of one’s requirements if it complied with the other.

“We have spent $250,000 on pricing between Price Control and VAT pricing,” he said. “We had to buy software, re-tag and put scanners in the store. When they force us to increase costs, you naturally increase prices for consumers.

“The Price Control unit is on a collision course with the VAT Unit. They’re each telling us they want two different things. They say they want two prices on price-controlled items.”

Declining to go into detail on the Government agencies’ differences, Mr Roberts nevertheless cited one example. “On Robin Hood flour, they want price control prices and the VAT price or, alternatively, to put in scanners in the stores so the public can do their own scanning,” he explained.

“They’re telling us two different things, and each group going into the stores is telling us something different. Sooner or later we’ll get a violation, and the judge will have to decide.

“That’s the situation. We’re in the middle, and whatever the judge tells us, we’ll do.”

Mr Roberts then told Tribune Business that Super Value may also be asked to “slow down” on its VAT filings and payments to the Government next year.

He explained that the supermarket chain is currently on pace to make 13 return filings and payments to the Government this year, rather than 12 monthly filings, due to the ‘period accounting’ method it employs.

The Super Value president said he understood that the Government would next year require the business to file monthly, in line with other VAT registrants.

Such a demand, Mr Roberts said, would throw Super Value’s accounting procedures into chaos and force it to hire extra resources.

“Most merchants are paying government monthly,” he told Tribune Business. “We pay them period. We pay them 13 times.

“I understand that next year, they’re going to demand that we pay monthly. That will throw us into chaos. They’re asking us to slow down; we’re paying them too fast.

“This Government is about 100 years behind when it comes to business. It must make the professionals in the civil service shudder.”

Mr Roberts added that much of the pre-VAT implementation concerns and confusion could have been avoided had there been a proper dialogue between the Government and private sector.

He revealed that Super Value “cancelled” a planned $10 million expansion of its warehouse due to fears that it would cost an extra 15 per cent (under the initially proposed VAT rate), not realizing that the tax could be ‘netted off’ or reclaimed as a business inputs expense.

“I cancelled a $10 million warehouse expansion,” Mr Roberts told Tribune Business. “I thought it was going to cost me an additional 15 per cent.

“Now that we have VAT I’ve learnt it wouldn’t have cost a penny more. You pay it and get it back, but nobody told the merchants that.

“I bought equipment and brought it in during December 2014 before VAT to remodel about six stores. It took me six months to install that equipment and pay storage on it. Now we have VAT, it wouldn’t have cost me a penny more bringing it in now, and that was not explained to the merchants,” he added.

“Nobody sat us down and said: ‘This is a consumer tax; it’s not going to cost you a penny’.”

Asked whether Super Value would take another look at the warehouse expansion, Mr Roberts said: “When you cancel, you cancel. You figure out other ways to do that. We did some things at the stores and at the warehouse.”

The Super Value, acknowledging the part played by the New Zealand consultants in getting the Government to reconsider many key VAT attributes, again questioned why it listened to foreigners when its own private sector was expressing the same concerns.

“They [the Government] should down and listen, and not cut off their ears and wait for foreigners to bring in hearing aids for them,” Mr Roberts said. “Overnight, they [the New Zealanders] restored the Government’s hearing.”