Nevis Legislature announces cost cutting measures to protect their people against global food crisis

In a move to protect the people of Nevis and to soften the impact of the increasing global food and oil prices, the Nevis Island Administration (NIA) moved with immediate effect, to implement tax relief measures on select food and non food items on the island.

Junior Minister with responsibility for Trade on Nevis just disclosed at a press briefing in Charlestown, that the Administration was committed to the formulation of policy to ensure that the cost of living was kept to a minimum.

?With this in mind, the government has decided to take steps which will lead to a reduction of the cost of imported foods and some none food items designed to counter the global crisis. The government has decided to cut consumption taxes on a number of items by a rate of at least 10 percent. Additionally, the NIA has decided to compute the consumption taxes on Cost, Insurance and Freight (CIF) only. The NIA believes that a reduction in consumption tax would reduce the cost of specified items to the consumer.

?It is important to note that the formula for the computing of consumption tax is cost insurance and freight plus import duties, times the relative percentage of consumption taxes. Consumption tax is therefore varied between 7.5 percent and 22.5 percent depending on the particular item. The government has decided to approve food items identified by the study of food consumption patterns, which was undertaken in 2007 and which captured a wide cross section of food consumption patterns in Nevis,? he said.

The Minister listed the items and explained that a section of the study identified four basic groups of food items consumed by the people of Nevis on a daily basis, which was used as a guide. He said the NIA had also given close attention to the nutritional value of the items listed in the food basket – 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.

According to Mr. Cozier, the reduction in consumption taxes coupled with the charge of consumption taxes on the CIF alone on the group of selected items, would reflect a significant reduction in the local prices of those products.

He said the Administration was in the process of implementing two strategies to ensure that the reductions were passed on to the consumer. It involved 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 were 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 that 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 corporation and penalties. We really go the approach first and foremostly from the standpoint of the Consumer Affairs Department of cooperation.

?We believe in a community like ours that cooperation goes a long way. I have already spoken to a number of the merchants and retailers informally and they have given their undertaking that this is something that they will respond to positively,? he said.

Mr. Cozier explained that he had planned to follow up the informal meetings by meeting with the merchants so that they could further consult on the matter.

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.

Mr. Cozier was accompanied by Mr. Dwight Morton Permanent Secretary in the Ministry of Trade, Hon Carlisle Powell Junior Minister with responsible for Communications, Deputy Premier and Minister with responsible for Health on Nevis Hon. Hensley Daniel and Senior Trade Officer in the Ministry of Trade Mr. Jermaine Stapleton.

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