Finance Minister Colm Imbert said the Government will reduce the list of zero-rated items to include only the most basic foods.
Speaking in the 12th sitting of the Parliament on Monday, Imbert announced a list of items that will no longer be zero-rated and will now be subject to 12.5 percent VAT.
He said the list has been reduced to only include the most basic foods and other necessary items.
The list of items which will no longer be zero-rated includes:
Rice (except parboiled rice)
flour (except all-purpose and wheat flour)
bread (except white and whole wheat bread)
cheese (except cheddar and rennet free cheese)
peanut butter
salted butter
pasta
cocoa powder
coffee
mauby
orange juice
herring
tuna
mackerel
icing sugar
biscuits
grapefruit juice
vanilla essence
tomato ketchup
sunflower seeds
yoghurt
dairy spreads
tea
cereal grains
prepared or preserved meats
prepared or preserved salmon
shrimp and prawns
cake mix
waffles and wafers
preserved vegetables and fruits
preserved tomatoes
preserves mushrooms
preserved vegetables such as preserved potato, preserved peas
jams, fruit jellies, marmalade
sauces and preparations
soups and broths
flavouring powder for beverages
coconut milk
artificial sweeteners
malt beverages
essence extracts and foods
spices,
edible seeds
all other fish edible parts of fish salted or in brine
The Finance Ministry also released the revised list of items which are still zero-rated which is available on the Finance Ministry’s website:
http://bit.ly/1IZnyik.
Items which are still zero-rated include foods such as corned beef, lactose-free or powered milk, margarine, white and whole wheat bread, baby formulas and baby milk substitutes.
Imbert said the decision to remove VAT on approximately 7,000 various items was an “ill-conceived” attempt to reduce the cost of living by the People’s Partnership Government.
He said that the latest available data indicates that 60 percent of all sales are either zero-rated or exempt and 50 percent of all imports are not subject to VAT, adding that the country is way behind the rest of the Caribbean in terms of the country's VAT system.
Imbert added that this will not mean an increase in the price of petroleum products, which will remain the same as stated in the 2015 Budget presentation.
He added that the Trinidad and Tobago’s VAT structure is favourable compared with other Caribbean regions such as Jamaica, Antigua and Barbados which implement a VAT of 15 percent.
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