Gov’t to determine whether businesses were fair in VAT-free Shopping Day

Government’s finance team will be working closely with the Fair Trading Commission (FTC) to uncover any unscrupulous activity that may have prevented consumers from reaping the full benefits of Monday’s VAT-free shopping.

Minister in the Ministry of Finance Ryan Straughn made the disclosure as he said that authorities will only consider repeating the initiative if satisfied its objectives were achieved.

In a Barbados TODAY interview, he also defended the short notice for the VAT holiday as a consumer protection strategy.
Straughn indicated that in the coming days, a comparative analysis of establishments’ pricing patterns between Saturday, December 18 and Tuesday, December 21 would be conducted.

“That is with a view to ensuring that the intention of the measure was actually achieved because we would have the data files that were used within the stores on Saturday, the data files that were used [on Sunday], we would have the data files that were used [on Monday] and we will be able to compare to see whether the pricing was actually reduced to give the impact so that consumers benefited,” he told Barbados TODAY.

“I am confident that we will have the capacity, once we are able to look at as many of the data files as possible, to say whether it has been successful and if there were people who took the opportunity to try to extract more.

“Then, obviously, that is a matter that we will deal with from the [Division of] Commerce and the Fair Trading [Commission] to ensure that consumers were protected.

I am confident that the process will go through smoothly and the truth is that if persons shopped appropriately they would have been able to benefit as much as they can,” Straughn added.

He confirmed that all businesses selling “physical goods” were required to participate in the vat-free day along with those whose low revenue exempt them from collecting VAT.

“The distinction is between the provision of goods and the provision of services,” he explained.
“Businesses that provide services like Chefette which is a restaurant providing food and beverage services for example were not eligible to participate.

“If a business has annual revenue of less than the $200,000 threshold, it is not required to register for VAT, then there would have been no discount for those goods since VAT isn’t charged to the customer.”

Meanwhile, President of the Barbados Chamber of Commerce and Industry (BCCI) Anthony Branker maintained that while consumers were able to benefit from the one-day VAT holiday, better notice should have been given for businesses to adapt.

“Businesses went beyond the call of duty and facilitated it, so I think it was a success for members of the public and some extra business for businesses,” said Branker on VOB.

“I think if I had to do it all over, we would have wanted to get the additional notice so that we could have our systems up and ready without having to go to the wee hours of [Saturday] night and the night before Monday.

“Some businesses didn’t open because of being unable to overcome the IT issues…but that was in a minority,” the BCCI president added.

Minister Straughn, however, maintained that the short notice given to prepare was intended to deter businesses from attempting to use unfair pricing.

Nevertheless, he said that ample time was given for businesses with digitised systems to make the necessary adjustments.

“Most businesses have a point of sale system where all the items in the store are digitally scanned through and, therefore, the adjusted price without the VAT was simply just a function of dividing the current values by 1.175 to then change what is vatable in the database which the IT people clearly have been able to do,” explained Straughn.

He insisted that the required change was “not as complicated as people made it out to be”.

“I think it is unfortunate the way that people have presented it, as if it caused confusion. We all know that businesses on a daily basis in this country change the pricing in their systems and they do it sometimes at specific points in the day, and therefore the IT capability is definitely there,” Minister Straughn said.

“As I explained to all and sundry in relation to the matter, in order to get the fairest opportunity for Barbadians, we could not in any way have given the opportunity for persons to make price changes that would prevent people from benefitting,” he added.

kareemsmith@barbadostoday.bb