By NATARIO McKENZIE
Tribune Business Reporter
The Government yesterday urged consumers to be "patient" as they familiarise themselves with the VAT-free breadbasket, with the industry suggesting "80 percent" of products fall into this category.
The Ministry of Finance, in a statement yesterday, said the Retail Grocers Association and the Manufacturers' Agents and Wholesalers Association had worked with it to facilitate the transition.
"This was critical to minimise any inconvenience to Bahamian consumers, and to ensure businesses are in compliance with the new laws and regulations," the Ministry said. "It is important to note the VAT-Free breadbasket is not limited to the price control list.
"The VAT regulations, which are administered by the Department of Inland Revenue, are directly tied to the classification of goods under the Bahamas Customs tariff headings. This allows for a broad range of breadbasket goods to be included in the VAT-Free list. Unlike price control, which only regulates a portion of breadbasket items, most types and variations under the breadbasket are VAT-Free with only a few exceptions, including prepared foods."
K Peter Turnquest, deputy prime minister, said: "The VAT-Free breadbasket is going to make grocery shopping a lot less expensive. Literally thousands of every day items are now VAT-Free.
"This is not something I need to promise consumers. This is something Bahamians will see for themselves when they look at their grocery bills and compare the difference. Before, Bahamians had to pay 7.5 percent on everything purchased in the food store. Now, Bahamians will pay zero VAT on most of their items."
Rupert Roberts, Super Value's president, said while grocery stores will end up collecting less VAT for the Government, those savings are going to Bahamians in the form of lower prices. "The list of VAT-free items is actually very extensive, and I think people will not realise the magnitude of the savings until they see how many VAT-free items are on their receipts," he said.
"In the case of Super Value, 8,000 of the items in our inventory are now VAT-free. That is around 80 percent of the store the Government is giving away in VAT. For some of the smaller convenience stores, nearly 100 percent of their items may very well be VAT-free. This means huge savings for consumers that will bring down the cost of living on a major weekly expense."
Philip Beneby, Retail Grocers Association (RGA) president, said: "It took a lot of effort to implement all of the changes, and we appreciate the collaboration with the Ministry of Finance over the past few weeks. Having an open line of communication helped to answer some of the important questions our members had.
"There are still a few kinks to work out, which are understandable, and we still have to make sure all of the businesses in every island have the right information. However, we feel confident that by and large the transition will continue to be smooth, and we also ask for the patience of consumers. All of our members and their staff have been working tremendously hard to re-price tens of thousands of items. The fact that most of them were ready on August 1 is commendable."
The Ministry of Finance said all forms of raw rice are now VAT-free, including white rice, brown rice and other forms of raw milled rice. All cooking oils are VAT-free, including corn oil, vegetable oil, olive oil and other cooking others.
All forms of flour are now VAT-free, including white flour, wheat flour, spelt flour or cassava flour. Most forms of cheese are now VAT free, including sliced cheese for sandwiches, block cheese for macaroni, or shredded cheese for making cheese and grits.
Also of note, in the cheese category, cream cheese and liquid cheese are not VAT-free. In the margarine category, liquid margarine is not VAT-free. Seasoned rice is not VAT-free. The exceptions exist based on how the international tariff codes are structured. Diary milk is VAT-free, but plant-based milks are not. Bathing soap, medicated soap and disinfectant soap are VAT-free but only in solid form. Liquid soaps, bath wash, disinfectant solutions, hand soap and dishwashing liquid are not VAT-free.
"Although there are some exceptions, there are still thousands of breadbasket items that are now VAT-free. By estimates of the Retail Grocers Association, the VAT-free breadbasket list covers over 80 per cent of the items in the store," the Ministry of Finance said.