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Sunday, 15 November 2020

Snackfood industry want VAT act amendments scrapped

LEGISLATION WATCH- Snackfood industry petitions House not to impose full VAT on sweets: Snackfood makers are lobbying the House Planning and Budgeting Committee to leave VAT on pastries and baked goods unchanged in any upcoming amendments to the VAT Act, CEO of snack food giant Edita Hani Berzi told the local press on Thursday. The move follows reports in the local press that the House plans to subject crackers and sweet pastries to the full 14% VAT rather than the current 5% schedule tax. The sensitivity of snack foods to price changes means that the application of a higher VAT rate could see their prices soar by anywhere between 50-100%, Berzi, who also heads up the Food Export Council, said.

One way or another, we won’t hear the end of this for at least another three months: Discussions in the House on the amendments will be postponed until the next legislative season when a new House is seated after the results of the still-unfolding election process. That won’t be until February 2021 at the earliest, parliamentary sources said.

Background: Some business groups are also opposing the proposed imposition of 14% VAT on the rent and purchase of commercial and administrative properties, with real estate developers arguing that they will not be able to cope with the additional costs because of covid-19 induced losses. The amendments would also subject most commercial advertising to the tax but scrap the 20% stamp tax on ads and allow tourists to claim VAT rebates.

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