Budget: Tea, Milk, Butter ... Prices Do Not Essentially Decline

Strengthen the competitiveness of local producers and also help them to cope with competition from imported products. This is the purpose behind this change occurred on the tax regime of 13 consumer products with the budget. Many initially thought that a price of tea, milk, butter, cheese, honey, soy, rice, ham, sausage or canned meat was coming. The Consumers' Association of Mauritius (ACIM) puts things in perspective.

This is a measure that will certainly benefit the producer but the consumer, he does not benefit from lower prices. " The possibility that the consumer enjoys the benefits of this measure remains uncertain due to a risk of lack of control in the use of these products as inputs. The reopening of the observatory of prices or the establishment of a committee to monitor prices have been more appropriate, " says Jayen Chellum, secretary of ACIM.

In fact, these products were already exempt from VAT. The only thing that changes: now they go on a diet to zero. What's the difference? The application of a zero rate regime is common in countries that use the VAT to fill the public coffers. The difference between the zero rate of VAT exemption and VAT system is that in the first case, an operator turns to the Mauritius Revenue Authority (MRA) to be refunded. In the second case, the right to a refund does not apply because the VAT is simply non-existent.

By cons, in a zero-rate regime, the obligation to pay VAT has not been abolished.

The only change is that it is not the consumer who pays the price.

Now it is to the Mauritius Revenue Authority (MRA) and not to the consumer that an operator will claim the cost of VAT. The MRA has two options: either it financially reimburse an operator or proposes to deduct the amount of tax the VAT he paid.