Members of staff of the VAT Unit manned a stand at the Vincy Heritage Village last week. A colourful display gave illustrations of the impact that VAT should have on costs. The display was illustrated with a shopping bag of groceries showing the impact VAT will have on prices in the shop.

“There was great interest from the public,” said Claudette Alexander, one of the VAT officers who volunteered to man the stand, “particularly in the evenings when the crowds of people coming to the festival were at their height. There was great demand for the leaflets and fliers we had prepared.{{more}} Some of the tax reductions should make a tremendous impact on a family’s shopping bill.”

Many goods will attract a lower tax under the VAT system. For example, chicken legs and lentils are currently taxed at 30%, mutton, fish and cheese at 20% and apples, pears and peaches at 40%. Under VAT they will all be subject to tax at the same rate, that is 15%. On the other hand, the tax on whole chickens will rise from 10% to 15%, and corn meal and cereals will be subject to 15% instead of the current 5%. But UHT milk, condensed milk and powdered milk will have a VAT rate of 0%.

“In general, most goods will be taxed at a rate that is lower than the current rates of Consumption tax,” said Gweneth Martin, a team leader in the VAT Implementation Unit, “but there will be a few items where the tax rate will increase.”