The upcoming general elections, often dubbed ‘the silly season,’ have prompted strong responses from Commerce Minister Emma Hippolyte regarding the opposition’s allegations about the government’s price reductions on selected food products.
At a media briefing on Monday, Minister Hippolyte firmly addressed the claims made by an opposition candidate questioning the legitimacy of reduced prices on commodities.
During the Budget Debate in April, Prime Minister Philip J. Pierre announced that 70 selected food items would be zero-rated by July, eliminating VAT on these products and ensuring a corresponding 12.5 percent price reduction.
Out of the 70 items, 45 are currently subject to the standard 12.5 percent VAT rate, while 25 are already VAT-exempt. This new policy is a comprehensive removal of taxes.
Hippolyte confirmed that her ministry collaborated with the Chamber of Commerce and local businesses to finalize the list, with approval from the Ministry of Finance for the July implementation. The date was subsequently pushed back to take effect in August.
“I need to clarify misleading statements made by Mr. Titus Preville, the United Workers Party (UWP) candidate in Babonneau and former permanent secretary in the Ministry of Commerce,” she stated firmly.
In her remarks, Minister Hippolyte clearly delineated the differences between zero-rated VAT and VAT-exempt items. Preville claimed that the government was attempting to mislead the public regarding the 70 zero-rated items.
Minister Hippolyte emphasized that in her previous statements in Parliament, she clearly articulated the distinctions between VAT-exempt items and those that are zero-rated, stressing the necessity of controlling rising prices.
“The core issue lies between VAT-exempt and zero-rated commodities,” she asserted.
Hippolyte explained, “If an item is VAT-exempt, consumers do not pay VAT, but businesses cannot claim the VAT on that item’s sale. Conversely, when an item is zero-rated, consumers are again not charged VAT, but businesses can reclaim the VAT on their associated expenses.”
She reiterated the significant implications of this policy, stating, “This allows the business community to pass VAT savings on to consumers, contributing to lower prices.”
Though Preville disputes the price mechanisms and claims UWP will alter the price structure if they assume office, Hippolyte countered that he was “the technical head of the Ministry of Commerce… and he failed to present any policy statements to the government that were not implemented.”
Minister Hippolyte asserted that the Ministry of Commerce has made substantial progress with its policies, effectively controlling the price of goods while also advancing initiatives like the MSME program and numerous other projects.
[R.A].