Confusion reigned at some supermarkets over Government’s new policy which removed over 200 items from the so-called basket of goods which did not attract the value added tax (VAT).
A day after the policy came into effect, supermarket operators said they were not clear how to classify some of the items, and that they were awaiting word from their suppliers.
In his June 15 Financial Statement and Budgetary Proposals Minister of Finance Chris Sinckler announced effective September 1, 2015 the basket of goods would contain 150 items, more than 200 fewer than the over 400 in the previous basket.
When a Barbados TODAY team visited a number of supermarkets across the island today, the operators indicated that they were still in the implementation phases as they were still awaiting some of the price changes form their suppliers.
And a number of them agreed that the classification on some items needed to be clarified.
A spokesperson for Trimart Supermarkets, who did not want to be identified, told Barbados TODAY “the whole thing has been difficult to navigate because of a lack of clarity on some tariff codes”.
“For example, flying fish code 3049000000 now has VAT but flying fish code 3037930000 does not. No one is clear so if we include VAT where we think we should and let’s say [one supermarket] interpret differently they could be cheaper or more expensive,” she said, adding that the way it was being done would cause some consumers to believe that some items were still in the basket when they were not.
“This weekend we will conduct price comparisons to see if our interpretations are correct or not . . . The codes are what are making the transition very difficult and people will feel the price difference,” she added.
The spokeswoman said the change in prices on some items would definitely change buying habits, expressing shock that some “healthy products” as well as cheese would now attract the 17.5 per cent VAT.
“Fruits and vegetables, nuts, all healthy products will be hit hard . . . VAT on imported fresh fruits? But Barbados does not produce enough to support itself. [VAT on] baby milk, chocolate items and items containing cocoa,” she lamented.
Over at Channell Supermarket in Collymore Rock, St Michael, operators there said they were still in the process of making the necessary changes as well, adding that they could only reflect the changes once they were supplied with the changes from the suppliers.
Managing Director Tony Catlyn told Barbados TODAY some items carried more than one tariff number, admitting that “it is not really that clear”.
“The whole classification needs to be clarified and made far more simple,” he said.
Saying they were not fully familiar with the tariff numbers, Catlyn and his accountant Denis Cadogan explained that the suppliers and the importers would be the ones to indicate to them what items would attract the price changes.
“This is another thing too, what do they want us to do? Is the Government saying that everything we bought whether it was a year ago or two years ago that it will carry VAT even though we did not pay VAT on it at that time? Or . . . is it that new products that are coming in that shows the VAT?” asked Catlyn.
He said he suspected that consumers would buy fewer items if they were budgeting the same amount of money to take to the supermarket.
“A consumer can’t spend anymore money than he has in his pocket,” he said.
“Call it what you like, it is a price increase on goods. That is how the consumer sees it . . . At this time can the country really afford a price increase on anything? The answer is no,” added Catlyn.
Adrian Springer, purchasing manager at the Savings Plus Supermarket in the Rock Dundo Plaza, Cave Hill, St Michael said that supermarket received a reminder from one of its suppliers today regarding the changes that took effect yesterday.
“We have some stocks that we will pass on to the customers before we put VAT on to it,” said Springer.
“I was checking today on the dog rice and they mentioned that VAT was on it and it started from this month, and the baby food,” he said.
Springer suspected that once the price changes were made customers’ spend would be impacted and they would start to complain.
“I believe people will still shop. They will just basically cut a little . . . but I always say you still have to eat to live so you can’t just stop buying food supplies because of the VAT. So people will complain at first but will still purchase the items,” added Springer.
He said operators of that supermarket were still “discussing the list”, adding that he was not aware of the process of passing the VAT on to Government.
Meanwhile, floor manager at Massy Supermarkets in SkyMall, Haggatt Hall Shane Pilgrim suspected the price increase would affect consumer shopping, but said it was still early days and officials of that supermarket would wait and see.
He agreed that all the items that have been removed from the basket were not clear “but as these items become more clear and the prices which will be set are more defined then we will be in a better position to say this is what it is going forward. But right now we are still in the process of finalizing what these things are and what impact it will have on the consumers,” he said.