Minister of Finance and Planning, Dr. the Hon. Peter Phillips, says the Government will ask the Consumer Affairs Commission (CAC) to monitor some food items, to ensure that the lowered General Consumption Tax (GCT) benefits are passed on to consumers.
He said the Government is also asking consumers, to “reject unjustified price increases,” report instances of questionable prices to the CAC, and to shop around.
Dr. Phillips, who was closing the 2012/2013 Budget Debate in the House of Representatives, on June 6, said that since the announcement and implementation of revenue measures for the fiscal year, “unfortunately, we are already witnessing situations where prices on some food items have been unjustifiably increased and this is outrageous."
“How can the lowering of GCT result in an increase in the price of a chicken patty? A chicken patty that costs $115 last week should not cost $120 today,” the Minister emphasised.
Meanwhile, the Finance Minister said the reduction of the standard GCT rate (from 17.5 per cent to 16.5 per cent), coupled with the reduction of the Corporate Income Tax rate on non regulated companies to 25 per cent and the lifting of the Personal Income Tax threshold, will result in loss of revenue amounting to approximately $4 billion.
“This is an injection into the domestic economy, which will help to stimulate economic activity. We have removed some goods from the exemption list to the taxable list, while at the same time preserving a basket of goods on the exempt list. This is aimed at protecting the poor and the vulnerable,” he told the House.
Dr. Phillips said that while the Private Sector Working Group (PSWG) on tax reform had recommended a GCT rate of 12.5 per cent, the Government was not able to reduce the GCT to that rate, because for every percentage point by which the rate is reduced, there is an annual revenue loss of $3.2 billion.
“If we were to accept the rate recommended by the PSWG, it would mean that we would have to find an additional $12.8 billion in taxes,” he said.
By Alphea Saunders, JIS Reporter