By NATARIO McKENZIE
Tribune Business Reporter
The DEPUTY prime minister yesterday conceded it was "no small order" for foods stores and pharmacies to reclassify products ahead of their value-added tax (VAT) "zero rating" on August 1.
KP Turnquest acknowledged that the Minnis administration's policy of VAT-free "breadbasket" food items and medication represents a "major change" for both consumers and retailers.
In a statement released yesterday afternoon, he said: "Once the changes take effect, Bahamian consumers will receive the benefits of the government's policy of VAT-free breadbasket items and medication. This is a major change as it involves thousands of items that will now be VAT-free."
Mr Turnquest said the Ministry of Finance had been consulting with the private sector and mobilising its officials to effect a smooth transition.
"I feel very confident about the readiness of the Ministry of Finance, and its ability to provide the business community with the information they need. We appreciate their continued input as we organise our internal teams, and we commend the business community for its commitment to compliance, particularly with the new VAT Amendment Act 2018," said Mr Turnquest.
"We know implementing the new VAT rate required businesses to update their entire inventories in a short period of time for the July 1 change over. This was done with great success. Now, they have it do again to reclassify and re-price the VAT-free items for the August 1 change.
"Again, this is no small order, but businesses and consumers should know that these efforts are in the interest of delivering tangible savings to the Bahamian people on one of their most important reoccurring expenses, groceries and medication."
The "breadbasket" list contains 23 categories of goods: Formula, bread, butter, cheese, condensed milk, cooking oil, corned beef, evaporated milk, flour, fresh milk, grits, canned fish, margarine, mayonnaise, mustard, powdered detergent, rice, bathing soap, soups and broth and tomato paste.
Mr Turnquest previously told Tribune Business that the zero-rating of "breadbasket" items, and removal of VAT from medicine, was designed to relieve the burden of a 12 percent rate on "those most vulnerable families".