Trade Ministry responds to Opposition Leader’s call to cut VAT and import duties


The Min­istry of Trade and In­dus­try says many of the rec­om­men­da­tions made the Op­po­si­tion Leader in her re­cent pro­pos­als to ease the eco­nom­ic strain on the pop­u­la­tion, al­ready are in ef­fect.

Ac­cord­ing to an of­fi­cial state­ment is­sued to­day by the Min­istry, im­porters al­ready en­joy ze­ro du­ties, and con­sumers al­ready are ben­e­fit­ting from ze­ro-rat­ed es­sen­tial food items and re­duced Val­ue Added Tax (VAT).

The Min­istry al­so notes that over 1,000 phar­ma­ceu­ti­cal prod­ucts do not at­tract cus­toms du­ties, fol­low­ing ne­go­ti­a­tions with CARI­COM.

The full text of the State­ment from the Min­istry, fol­lows…

RE­SPONSE TO THE LEADER OF THE OP­PO­SI­TION’S REC­OM­MEN­DA­TION FOR THE RE­MOVAL OF IM­PORT DU­TIES AND VAL­UE ADDED TAX (VAT) ON BA­SIC FOOD ITEMS

The Min­is­ter of Trade and In­dus­try has not­ed the rec­om­men­da­tion made by the Leader of the Op­po­si­tion for the re­moval of Im­port Du­ties and VAT on Ba­sic Food Items as part of the Op­po­si­tion’s Eco­nom­ic Man­i­festo Plan.

Over the pe­ri­od 2015-2020, the Min­istry of Trade and In­dus­try (MTI) has suc­cess­ful­ly ob­tained CARI­COM ap­proval for the sus­pen­sion of the Com­mon Ex­ter­nal Tar­iff (CET) on a range of a ba­sic food items in­clud­ing, milk, sug­ar, oil, cheese, corn beef, canned her­rings, tu­na, mack­er­el, sar­dines, pas­ta, in­fant for­mu­la and juices. This means that all im­porters al­ready pay ze­ro im­port du­ties for the im­ports of said items.

In ad­di­tion, since 2016 the Gov­ern­ment of Trinidad and To­ba­go un­der­took an ag­gres­sive ra­tio­nal­iza­tion of the Val­ue Added Tax (VAT) regime in Trinidad and To­ba­go. As a con­se­quence of this ex­er­cise, the rate of VAT on stan­dard rat­ed items was re­duced from 15% to 12.5% in 2016 (Le­gal No­tice No. 17 of 2016) bring­ing fur­ther re­lief to con­sumers by en­hanc­ing their pur­chas­ing pow­er. 

In ad­di­tion, as a re­sult of this ex­er­cise the vast ma­jor­i­ty of ba­sic food and es­sen­tial items re­mained ze­ro-rat­ed, mean­ing that no VAT is cur­rent­ly charged or payable on such items and hence are al­ready VAT free which all con­sumers would be able to see on any su­per­mar­ket bill.

Ac­cord­ing to Sched­ule 2 of the Val­ue Added Tax Act, some of the ba­sic food items that are cur­rent­ly ze­ro-rat­ed in­clude rice (par­boiled and brown), flour (all-pur­pose and wheat), pas­ta (un­cooked or un­stuffed), cheese (ched­dar and ren­net free) milk (in­clud­ing in­fant for­mu­la and sub­sti­tutes, evap­o­rat­ed and pow­dered), bread (white and whole wheat), corned beef, sar­dines, smoked her­ring. The com­plete list of ze­ro-rat­ed items can be ac­cessed on the Min­istry of Fi­nance’s web­site (www.fi­nance.gov.tt).

Trinidad and To­ba­go has al­so re­cent­ly ob­tained ap­proval from the Sec­re­tary Gen­er­al of the Caribbean Com­mu­ni­ty (CARI­COM) for the sus­pen­sion of the Com­mon Ex­ter­nal Tar­iff (CET) on a spe­cif­ic list of Phar­ma­ceu­ti­cals. The sus­pen­sion which was im­ple­ment­ed na­tion­al­ly via Le­gal No­tices Nos 77 and 78 dat­ed 22 April 2020, ex­pires on 30 April 2021 will al­low for cit­i­zens to ac­cess af­ford­able med­ica­tion through re­duced prices.

In ad­di­tion, the sus­pen­sion of the CET or cus­toms du­ties on Phar­ma­ceu­ti­cals cov­ers over one thou­sand (1,000) prod­ucts not pro­duced re­gion­al­ly. The list of Phar­ma­ceu­ti­cals which can be ac­cessed on the Min­istry of Trade and In­dus­try’s web­site (www.tradeind.gov.tt), was de­vel­oped through ex­ten­sive con­sul­ta­tions be­tween the Min­istries of Trade and In­dus­try, Health, and Fi­nance, along with the Cus­toms and Ex­cise Di­vi­sion and the pri­vate sec­tor.

Mem­bers of the na­tion­al com­mu­ni­ty are ad­vised that the cu­mu­la­tive costs of the above mea­sures in terms of rev­enue for­gone are in the hun­dreds of mil­lions per an­num, which is a sig­nif­i­cant con­ces­sion at this time, giv­en the fis­cal con­straints faced by the Gov­ern­ment of Trinidad and To­ba­go since 2015.

The above proac­tive mea­sures of the GORTT at this time has al­so di­rect­ly con­tributed to Trinidad and To­ba­go ex­pe­ri­enc­ing the low­est rates of in­fla­tion since 2015. Ac­cord­ing to the Cen­tral Bank of Trinidad and To­ba­go, the rate of food in­fla­tion in 2019 stood at on­ly 1% when com­pared with the av­er­age in­crease of 11% dur­ing the pe­ri­od 2010-2015.

The Min­istry of Trade and In­dus­try will con­tin­ue to col­lab­o­rate with oth­er Min­istries and the pri­vate sec­tor to im­ple­ment poli­cies aimed at en­sur­ing price sta­bil­i­ty, ad­e­quate and re­li­able sup­ply of ba­sic goods, preser­va­tion of the coun­try’s eco­nom­ic sta­bil­i­ty and busi­ness con­ti­nu­ity de­spite the chal­lenges pre­sent­ed by COVID-19.





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