TAX EXEMPTION ON CONSTRUCTION MATERIALS UNREALISTIC
February 16, 2022 11:31 pm | Posted in Business News | Share now TwitterFacebook
By Mavuku Tokona.
Last Friday Prime Minister Bob Loughman reminded the public during the launch of Vanuatu Fresh Market at Tagabe that import tariffs for construction materials were exempted from tax.
According to the Director of Customs and Inland Revenue Harold Tarosa, this exemption came into effect last December, however, the retail prices of hardware materials on shelf hasn’t really changed due to the ocean freight costs.
One of the main building products that has nearly doubled in price is the cost of cement.
Customs Director Tarosa, mentioned that cement had a 5% import duty and this has been removed, yet the average cost of a 40kg bag of cement is almost VT1600.
Pacific Timber and Hardware (PTH) Manager Ritesh Kumar said the government initiative doesn’t make much of a difference with PTH profits.
“It won’t be affected much because the duties drop but the sea freight cost rose, it’s not making much difference, it won’t be impacting our profits,” he said.
Mr Ritesh added that if the government truly wanted to assist local hardware stores, then removing VAT and purchasing products locally would help.
“Invest into the local hardware stores, that would give the benefit to the customers, they would purchase items cheaper.”
Branch Manager of Vila Distribution Calvin Fitzpatrick said, “It’s a cost saving which we can pass on to the customer.”
The Branch Manager of Wilco Hardware Niel Lee added that there is an obvious imbalance, the gesture by the government is appreciated.
“It’s helping but the freight increased more, the freight increase by 20-30% and the import duty decreased by 5% so it’s limiting, we will try our best to make the price of cement stable.”
