By John Denny
Nevis Reporter
(Charlestown, Nevis) – The consumption tax cut implemented by the Nevis Island Administration on April 29 will not be felt by consumers until after June 1, according to Junior Minister with responsibility for Trade on Nevis, Hon. Dwight Cozier.
“The cuts are going to be phased in over a period of time,” said Mr. Cozier. “The merchants and grocers have stock on their shelves that has been charged consumption tax. To ask them to lower their price now would be asking them to lose money. It wouldn’t be fair to them.”
Rice, all flour, Cream of Wheat, Sardines and Tuna was approved at 100 percent reduction in consumption taxes and so to are baby pampers and adult diapers while cheese, white potatoes, oats, butter, Vienna sausages, dried peas, carrots, bananas, orange juice and apples would receive a 10 percent reduction on the current rate of consumption tax.
Mr. Cozier plans to meet with the Chamber of Industry and Commerce to work on a framework for the enforcement of the tax cut.
“I use the word ‘enforcement’ loosely,” said Cozier. “We plan on this being a cooperative effort. I have already spoken to many of the merchants in Nevis and I don’t foresee any problems with implementing this tax cut.”
The tax cut was implemented as a reaction to the global food crisis that has sparked civil strife worldwide and regionally as close as Haiti.
The NIA conducted a study and identified four basic groups of food items consumed by the people of Nevis on a daily basis and gave consideration to the nutritional value of the items listed in the food basket.
The reduction in consumption taxes coupled with the charge of consumption taxes on the cost, insurance and freight alone on the group of selected items, should reflect a significant reduction in the local prices of those products According to Mr. Cozier.
The Administration is in the process of implementing two strategies to ensure that the reductions are passed on to the consumer. It involves direct consultation with all the merchants and retailers of food on Nevis, to inform them of the decisions taken by the Administration and to make them understand how it was intended to carry the cost reductions into the market.
The second approach would involve policing the prices on these specified products by officers of the soon to be Consumer Affairs Department at the Ministry of Trade.
The Minister said although there are no punitive measures in place to ensure that the reductions were enforced, there was need for collaboration with the merchants and retailers of food on Nevis. He noted that there was no room for non cooperation in the Nevis community.
“We have no penalties in mind as yet and we are not thinking of it as a punitive thing. We are thinking more in the context of cooperation and we believe that our consultation we are about to have with the merchants, retailers and other business people on the island of Nevis will alleviate the need for such things as non cooperation and penalties. We really go the approach first and foremost from the standpoint of the Consumer Affairs Department of cooperation,” he said.
With regard to a possible expiration date for the new policy in reductions, the Minister said that it was the desire of the NIA to protect the people of Nevis against the international volatility in the markets as regards to price.
“So we can’t definitively say we are going to extend it till the end of the year or next year it is here to stay,” he said.
