OPPOSITION SPOKESMAN on Finance, Audley Shaw, yesterday disputed Government's claims that the decision to transfer zero-rated items to exempt status under the general consumption tax (GCT) would have no impact on price levels.
"It is economic reasoning like this that has kept us in the economic
muddle for the last 15 years," Mr. Shaw said during his contribution to the 2005/2006 Budget Debate in Parliament yesterday.
AN EFFORT TO TIDY UP COLLECTION
Minister of Finance and Planning, Dr. Omar Davies, announced while opening the budget debate last week, that the Government will be transferring zero-rated items to exempt status as part of an effort to tidy up tax collection and generate revenue of $3.6 billion.
He said, however, that the move would not affect price levels as no GCT would be charged on final sales.
But yesterday, Mr. Shaw said that tax experts would confirm that the move would result in an increase in the price of the affected items as distributors sought to protect their profit margins.
"My calculated estimate is that the increase will range from 10 to 30 per cent, depending on the item," he said.
Mr. Shaw said several items would be affected including animal feeds, fertilisers, insecticides, prescription drugs, contraceptives, tampons, crutches, artificial limbs, school books, and magazines.
R.H.
