VAT Office on watch for 2008

The Value Added Tax (VAT) Unit will be keeping a very close eye on businesses in the New Year to make sure that VAT regulations are obeyed.{{more}}

Concerned about some non-conformance to the VAT, the Unit has come up with an innovative idea that can also see consumers winning valuable prizes in the process.

Addressing the issue of food prices and VAT in his wind up presentation in the just concluded budget debate, Prime Minister Dr Ralph Gonsalves announced a VAT lottery draw that is soon to come on stream.

The way it works is that consumers will be encouraged to collect their receipts when they shop and put them in assigned containers to be entered into a draw for prizes.

The idea is that by having the paper trail, the unit will be better placed to assess the level of compliance to the VAT regulations, and to spot any irregularities in pricing and other things with the business houses.

The format for the draw is still to be decided, however.

Dr Gonsalves again stressed that the rising food prices had nothing to do with VAT, reading from recent random copies of international financial newspapers, where concerns about escalating food prices are plastered on the lead pages.

Dr Gonsalves said that he is “going to be very upset” if come January 1st the prices on the additional items that have been zero rated or exempt remain the same on existing stocks in places of business.

He said that if this is so, then it would mean that the proprietors are pocketing the extra 15 per cent that should have been VAT before the new adjustments.

During his 2008 budget presentation, Dr Gonsalves announced that in 2008, among other things, several food items, including: whole chicken legs, table margarine, cooking margarine, yeast, cooking oil, baking powder and salt have been zero rated. Also zero rated are baby diapers, toilet tissue, undergarments, energy saving bulbs and sanitary napkins.

Added on the exempt list are: onions, lentil peas, garlic, and pigeon peas.

These and other adjustments to the VAT have been estimated to cost the government an estimated $6 million in revenue next year. (KJ)