The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The “era of Value Added Tax (VAT) politics” is making things difficult, one large food store chain executive said.

Debra Symonette, Super Value’s president, told Tribune Business they are trying to formulate a plan to handle the VAT change to 10 percent considering the thousands of items the food store chain has on the shelves.

She said: “The accounting system is the easy part. So, when the customers go to the register that will definitely be straight, it’s just the pricing of the individual items on the shelves that would take a bit more time.”

Stores will have a 90-day grace period to adjust the prices of goods on the shelf after January 1 when the VAT rate will be reduced from 12 percent to 10 percent.

Referring to the process the company had to undergo during the elimination of the penny at the end of 2019, Ms Symonette doesn’t expect the accounting burden to be that problematic with the revision of the VAT percentage. “We’ll just change the percentage in our system and it will update the point of sale system,” she said.

Ms Symonette also said when VAT was first implemented and the company’s owner, Rupert Roberts, had met with the New Zealand consultants on how the programme will be rolled out, the consultants had “warned” against constantly changing the VAT because it would end up being a burden to everyone in the process.

“They should always try to be consistent because all of the changes makes things difficult. What Mr Roberts in earlier comments was trying to remind the government was that the more straightforward it is the better,” she said.

“The bunch of exemptions and the continuous changing of the percentage that just makes it more difficult for everybody. So, if they could just come up with one thing and stick to it that’s the best way to go.”

She added we are in the “era of VAT politics” now as the 10 percent slapped on breadbasket items that were previously zero rated is going to have a significant effect on how much people choose to spend especially when inflation is added in.

Ms Symonette said: “People will continue to shop, but they won’t be able to buy as much as they used to buy. It’s going to be a lot more difficult for some people to make their budget stretch further.

“Despite all of this we are beginning to see things picking up for the Christmas season. So, we’re hoping for a good Christmas. I think a lot of people are going to try to beat the 10 percent VAT increase.”

Dwayne Higgs, general manager of WHIM Automotive, who attended a recent information session with Ministry of Finance officials, said they “don’t understand how things work,” when it comes to the grace period being given to businesses to adjust their prices on the shelf.

He said: “They don’t deal with the everyday person on the street. They seem to be forgotten, and they’re high and mighty now and forgot that they’re not the one who’s going to deal with the person who’s only buying breadbasket items and their grocery bill goes up by 10 percent. That’s the person. And now we have VAT on medication. So yeah, we’re reducing by two percent over here, but we’re increasing by 10 percent over here.”

“Overall for us it’s just reduce it from 12 percent to 10 and we have 90 days to re-price, other than that I don’t see a big impact from it. If people could come in and say they saved two percent on something, I don’t think it’s going to drive any huge sales. I don’t see it being a major impact either way.”