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Minister cracks down on shops to apply new prices
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Minister cracks down on shops to apply new prices
Trade minister Motee Ramdass is angry and he has threatened to take measures against shops which do not apply the new prices resulting from the change in import duties that were announced in the budget.
On the other hand, it seems that these measures are not so easy to apply as it appeared at the beginning whether for mass consumption products sold in supermarkets or those of luxury boutiques. Certain practical points are not clear and they will have to be addressed by the authorities if the duty-free island is to become a reality (see inset).
Last Friday was the deadline for all businesses to bring down their prices following the budget. The minister of Trade has elaborated a new strategy against those who do not follow the rules: “Name and shame”. Shop owners who do not bring down their prices will accordingly find their names published in the press. This strategy is widely and effectively used around the world and it will also serve as a price guide for consumers.
Products such as fruit, canned food, coffee and butter, for example, can be sold 40% cheaper. The minister is therefore encouraging importers to search for new suppliers. Brazil is a very competitive source; products that are more expensive in euros will work out cheaper through payment in US dollars. Importing from Brazil has already begun; for example, beef and shoes work out much cheaper. Chicken sausages are 40% cheaper than those from Europe. Jumbo Score says that it is willing to import at cheaper prices from Brazil even though other representatives have been on the market for years.
In the meantime, whilst importers are looking for other suppliers, the minister is continuing his rounds across the country. Last Thursday he made a surprise visit at one of the Curepipe supermarkets. He expressed his satisfaction at seeing that there was a general price cut on at least 80% of products. The minister was equally pleasantly surprised by How Hong, where prices of many goods had been decreased.
The minister has not yet finished his checks! Shops selling clothing, perfumes and electrical appliances are next on his list!
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Duty free or tax free?</B>
The problem for luxury boutiques is not exactly the same as for supermarkets. It seems it has nothing to do with bad faith or any such problems but is rather linked to the value added tax (VAT). The owners of duty-free boutiques met the Comptroller of Customs, Bert Cunningham, last week, and explained that their main problem is the 15% VAT on imported goods. The 15% tax is refunded to customers when they leave the country and collect their goods. Although the owners do not contest the budget as such, they consider that many points have to be clarified, as the president of the Mauritius Export Processing Zone Authority (MEPZA) told l’express after the meeting. To try and solve the problems, other meetings will be organised with VAT and Finance ministry officers. The aim is to allow tourists coming to these shops not to pay VAT and to be able to collect their goods as soon as they have paid for them. Mauritians will benefit from reduced prices but they will have to pay VAT.
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