Enill: Govt to cut VAT on food

His disclosure came on Tuesday in the Senate as he pilotted two motions related respectively to the Treasury Bills Act and Treasury Notes Act by which the Government hopes to mop up excess liquidity in our financial system.

Admitting that food prices are high, Enill delivered what many present interpreted as being a Budget curtain-raiser.

“We will continue to pursue policies such as the removal of VAT on targeted food products, the introduction of the Smart Card for the vulnerable in our society, the provision of income support to the aged, the reduction in income taxes to the working class, free education to all, and state-funded medical drugs...”.

Enill said the cost of vegetables had risen from 2003 to 2005 by 48 percent, and the cost of fruits by 20 percent. He said that overall, between 2000 and 2005, food prices in Trinidad and Tobago had risen by 14 percent or almost twice the average increase for Caricom.

He blamed high food prices on “structural decline” in local agriculture, flood damage to crops, and a cut in imports from Caricom whose agriculture was damaged by hurricanes.

Inflation overall, he said, had reached 6.9 percent in 2005, up from 4.8 percent in 2000 and 3.7 percent in 2004.

He blamed the rise in overall inflation to a rise in fuel prices which he said are related to higher import costs and freight costs, in spite of a $1.3 billion governmental subsidy for domestic fuel and energy.

In his two motions, Enill sought permission from the Senate for the Government to sell up to $15 billion in Treasury Bills and $5 billion in Treasury Notes.