By Petronella Sibeene
Beginning 1 August, 2008, consumers will pay less on selected basic food items, more than a month after President Hifikepunye Pohamba directed an amendment to the VAT Bill.
Permanent Secretary in the Ministry of Finance, Calle Schlettwein, announced on Friday that businesses would next week Friday slash off the value added tax (VAT) on selected basic foodstuffs.
The move is aimed at bringing relief to thousands of Namibians today suffocated by soaring costs of basic food items.
The consumer reprieve comes in light of skyrocketing food and fuel prices that have led to many consumers’ pockets stretching.
The permanent secretary said from 1 August, 2008, fresh and dried beans, sunflower cooking oil, fried out or processed animal fat, bread and cake flour (sifted and unsifted) would not be taxed.
“Businesses are therefore requested to adjust the VAT rate from 1 August 2008 to ensure that the zero rating of the basic foodstuffs would benefit especially the poor in this country,” Schlettwein said in a statement.
He added that once these items are served as a meal or prepared food, the plate will not qualify for zero rating of tax.
Prime Minister Nahas Angula earlier told New Era he had instructed the Ministry of Trade and Industry to come up with practical guidelines to be followed by retailers to ensure total compliance with Government’s decision on zero rating tax on selected food items.
Retailers since Government’s announcement on VAT exemption have expressed willingness to implement the new prices on the selected items, as soon as a green light is given.
Deputy Minister of Lands and Resettlement, Henock ya Kasita, says the well-intended measure could be abused by some retailers, thus the Government should institute a team of inspectors with the capacity to monitor compliance.
Ya Kasita urged consumers to report to the police any irregularities regarding compliance by shop or business owners.
He added that whoever is found guilty of not complying with the Government decision should be fined N$500?