Zero VAT measure having positive impact

The zero VAT measure appears to be having a stable positive impact a month and a half into its implementation, the energy ministry announced on Friday.

According to a survey carried out by the ministry’s consumer protection service, the prices of products in seven categories are still holding at 86 per cent of their price immediately following the measure’s introduction.

The cabinet approved zero VAT on certain consumer goods on May 2 in a bid to provide some relief amid inflationary pressures.

The zero VAT applies to bread, milk, eggs, baby food, baby and adult diapers, as well as female hygiene products.

The consumer protection service recorded the price of 65 products in these categories in nine different supermarkets at 58 sales points all over the island. The checks were carried out in two stages, before and after the implementation of the measure, on May 3 and June 22.

According to the ministry, the price register shows that any fluctuations in the general prices of the category items can be justified by market data.

Discounts or offers by supermarkets account for price differences among individual identical category products.

The biggest discrepancy in the application of the measure was recorded in baby products, such as food, milk and diapers.

The service concluded from its research and feedback that the implementation of the measure was successful and offered a significant benefit for consumers.

Consumers are encouraged by the service to do thorough market research to identify affordable products that meet their needs.

The zero VAT measure is set to expire on October 31 this year.

Meanwhile, in June the finance ministry prepared a second list of products to be placed under a new VAT bracket of three per cent, for consideration by the EU Commission.

VAT rates are currently set at zero, five per cent and 19 per cent.