The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Building materials suppliers and the Ministry of Finance met virtually on Friday to organise the sector’s VAT reporting during the three-week hurricane preparedness tax holiday that begins on July 9.

Merchants told Tribune Business they only need to make “straightforward” adjustments to their point-of-sale systems to capture the products that will be VAT “zero rated” by the government for the final three weeks of July.

Anthony Roberts, City Lumber Yard’s general manager, told this newspaper that the list of “zero rated” items includes what he supplies such as from flash lights, batteries and plywood.

He added that he can “make it work” in time to take advantage of the government’s tax holiday, meaning he can have all the items in his point-of-sale system adjusted as necessary to be zero-rated for his customers. The “zero rating” designation means that, in addition to consumers not being charged 12 percent VAT on the purchase price, suppliers will also be able to reclaim the levy they pay on their input costs.

Mr Roberts added: “We can get it done electronically so that our computer system will take care of it and we don’t make any errors. I’m fairly certain that there’s a way around it.”

Issues with items already landed, and which building suppliers have paid VAT on already, is a concern that is “misplaced”, said Mr Roberts. “The items that I bought before, during or after that VAT I’ve paid, I’m able to deduct from my VAT submission.

“What this VAT holiday does is that the person who is going to miss out on the revenue here is actually the government’s Department of Inland Revenue (DIR), because instead of collecting 12 percent on their behalf on plywood or tarps, they’ve given a VAT free-holiday.

“I’m not sure if people are getting that right. Whether I bring in stuff in the middle of July or last week, whatever I bring in and pay VAT on I’m able to get that back from the VAT I collect on the government’s behalf. That’s how the thing works, so I’m not seeing that as an issue.”

All parties were working to finalise outstanding matters last week. A reporting structure has to be sent to building suppliers on how they should treat zero-rated items when filing VAT returns to the Department of Inland Revenue.

Tribune Business understands that a follow-up Zoom meeting was held on Friday between the Ministry of Finance and building supply stores to organise the reporting structure and sort out other matters.

Mr Roberts said: “We’ve just been e-mailed on Friday by the Department of Inland Revenue on how it is to be reported; some issues about layaway. We don’t do layaways here, but they need to be able to have us report, certainly in terms of our VAT returns and what was zero rated, but that should be pretty straight forward.”

Gary Burrows, Tops Lumber and Plumbing’s general manager, said he, too, has been notified of the zero-rated list of hurricane supplies for the upcoming VAT holiday. “I’m comfortable with the list,” he added. “It’s just a matter of getting the particular numbers in question in the system and getting that sorted out. That should be straightforward.”

The items that will be zero-rated for the three-week period include flashlights, drop cords, uninterrupted power supply (UPS) systems, battery-operated fans, batteries, tarps, pre-filled sand bags, water containers and cans, gas and diesel, storage containers, first-aid kits, plastic sheeting, oil lamps, candles and portable radios.

Oil lanterns and the bottles used for them, as well as duct and masking tape, empty five-gallon buckets, raincoats and water bots, life jackets, hurricane lanterns, sternos, butane portable stoves, manual can openers, plywood, coolers, insect repellant, storm shutters and residential generators will not carry VAT during the three-week waiver period

The VAT holiday for hurricane supplies was announced by the Prime Minister during the just-completed Budget debate. The measure was designed to encourage, and make more affordable, preparations for a hurricane season that lasts until November 30.