Imbert clears air on which foods will become VAT-free

FINANCE Minister Colm Imbert has clarified what food items will be exempt from the 12.5 per cent value-added tax (VAT) from November 1.

The list includes a range of oils, cereals and roti skin.

In a media release on Wednesday, the Finance Ministry, on Imbert's behalf, said he has noted commentary about food items currently subject to VAT, and those which are not.

The ministry said the list identified in his 2021-2022 budget presentation on Monday was not an exhaustive one but was simply designed to illustrate some of the most commonly purchased items by most households, where the Government can influence the prices of these items downwards by making them VAT free.

It said, “The Minister of Finance is grateful for the public commentary because it has allowed him to clarify Government’s policy decision regarding the list of basic foods being considered for zero-rating, and to clear up misinformation being spread in the public domain.”

The ministry explained that in the 2016 list, the first broad category of food that was VAT free was “unprocessed food of a kind used for human consumption” and this classification allowed for all unprocessed vegetables, fruit, meat and fish to enter TT and be zero-rated.

The definition of “unprocessed food,” it pointed out, meant that the food contained no additives.

“After that broad category of unprocessed food, several basic food items that are “processed” were identified on the list on a stand-alone basis as being zero-rated for VAT.

“These include items such as sardines, corned beef, bread, flour, pasteurized milk, rice etc,” the release explained.

It further said that contrary to comments made in the public domain, not all canned meats, which is an example in the list given by Imbert on Monday, are free of VAT.

“Canned sausages are not VAT free at present, nor are any other canned meats, other than corned beef. Similarly, while sardines and smoked herring are free of VAT, tuna and mackerel are not, as is also the case with other canned fish. Further, no canned vegetables are currently free of VAT, such as corn, peas and mixed vegetables,” it further explained.

In addressing the issue of curry, it said while blame is not being cast on anyone or any association, there was an error in the submission by the Supermarket Association (SATT) on recommendations for VAT removal.

“That was indeed an error on the list of items recommended for removal of VAT that was sent by the Supermarket Association to the Minister on October 3 and not picked up by the technocrats in the Ministry.

At present curry is VAT-free, but black pepper and other seasonings, ghee and some other spices are not. These latter items are all on the proposed list of food items that will now be zero-rated for VAT on November 1.

SATT president Rajiv Diptee told Newsday the association was satisfied with Imbert's clarification of zero-rated items and has been working closely with the ministry on the issue.

ITEMS SET TO BE VAT-FREE

Vegetable/soya bean oil, coconut oil, canola oil, ghee, peanut butter, black pepper and other spices, family cereal, cereals for children, hot cereal oats, milk substitute, condensed milk, instant coffee, ground coffee, steel cut oats, black tea (3kg and under), green tea (3kg and under), orange juice, apple juice, still water (bottled water), seasoned meat, sausages (canned or otherwise packaged);

Canned tuna, canned mackerel, canned peas, canned peas, canned beans, canned corn, canned mixed vegetables, mayonnaise, ketchup, roti skin, soup (packaged), geera (crushed or ground), soya chunks, soya minced, ground dhal, cheese slices, table butter, pigtail, ham slices, turkey slices, chicken lunch meats, bologna, fresh juice and biscuits and crackers.