Consumers grapple with VAT prices
By Nicosia Smith
Stabroek News
January 3, 2007
Now that the Value Added Tax (VAT) is here consumers yesterday faced increased prices in the snack bar, the variety store and the supermarket without being sure that the prices reflected the removal of the consumption tax.
Many consumers did not find the extra charges amusing and complained bitterly to Stabroek News during visits to several supermarkets and snack bars.
On Monday VAT officially came into being and it will replace six existing taxes including, the Consumption Tax; Purchase Tax; Telephone Tax; Service Tax; Entertainment Tax and the Hotel Accommodation tax.
Several of the stores that Stabroek News visited yesterday have maintained their old prices and simply slapped on 16% VAT.
One consumer had a black coffee awakening yesterday morning at Demico House on Camp Street. The $110 coffee at Demico House as of December 31, 2006 is now $128 with VAT at 16%. And at Hacks Halaal Restaurant and Take Away Service on Commerce Street consumers yesterday midday were perplexed by the increased charges on their snacks.
During a visit to the food outlet during the busy lunch period Stabroek News observed customers speaking about the extra charges and remarking that according to the VAT advertisements some prices were to decrease not increase.
One customer cashed for chicken fried rice and the price was $750 exclusive of VAT; and the VAT charge was listed as $120, a total of $870. This consumer remarked that the VAT charges were substantial and pointed out that the many public advertisements said that prices would decrease. Hacks Halaal had its VAT registration certificate displayed for the public.
On a visit to Bounty Meat Centre on Regent Street and Orange Walk yesterday morning Stabroek News observed signs notifying the public that the shelf prices were not VAT inclusive, and that VAT would be calculated when the items are checked out. The VAT registration certificate was not visible upon this newspaper's visit but Stabroek News was assured by a manager at the head office that this would be rectified.
One shopper leaving Bounty showed Stabroek News the VAT charges on his bill but did not query the extra VAT charges of $28 on the $175 shaving cream, totalling $203. The seaman was more upset about the increased prices at a fast food outlet and stated that he will not be eating out at certain food places. Chicken has increased by 16% since it faced no consumption tax previously.
A bank employee having lunch at the Rose Bud Cafeteria at Fogarty's Supermarket was faced with an extra $48 VAT cost for a pizza and a drink that would have cost $300. This employee told Stabroek News that the cafeteria was the closest place to work and so it is a suitable place for lunch and she noted as well that she has "got to eat."
The VAT registration certificate at the cafeteria was visible and throughout the Fogarty's Supermarket. There were also signs notifying the public that the shelf prices did not include VAT and this would be calculated at the cashier. One shopper told Stabroek News that she did not see price changes at this supermarket and that the prices were similar.
During a visit yesterday morning at Nigel's Supermarket at Robb Street, Stabroek News did not see a visible display of the VAT registration certificate and no staff member could point this newspaper to its location after an inquiry. Stabroek News was told that the managers were in a meeting and were unavailable to answer queries. There were no signs notifying the public if the shelf prices were VAT inclusive or exclusive.
This reporter asked one shopper leaving the supermarket if shoppers were charged VAT, but the shopper could not identify the initials VAT on the bill only the words 'sales tax'. The VAT and Excise Tax Department has informed Stabroek News that businesses should have the VAT clearly inscribed on bills.
At Bonny's Supermarket there was no VAT registration certificate on public display yesterday morning, but the cashier said that they were charging VAT. Stabroek News was told that the registration certificate would be on display by yesterday afternoon.
At the White Castle Fish Shop on John and Hadfield streets the price for a box of fish remained the same - $500 - and plastic-bottled drinks were from $160 per bottle.
During a visit to the VAT and Excise Tax Department yesterday, Karen Chapman, Director of Legislation & Tax Advisory Services, told Stabroek News that businesses were still inquiring about the procedure for charging VAT. They were also inquiring, said Chapman, if VAT is to be charged on old stock and to services provided to the government, while also seeking general information on VAT.
Chapman also noted that the Consumer Affairs Division at the Ministry of Tourism Industry and Commerce, the VAT and Excise Department legal team and pharmacists are working to define what over-the-counter medication is. Stabroek News has received complaints that VAT is being charged on vitamin supplements and this has also been a concern for some members of the public as vitamins are commonly prescribed by doctors.