Service charge

Suspension of Service Charges on Imported Price-Controlled Goods

Permanent Secretary at the Ministry of Trade and Consumer Affairs Sophia Alfay-Henry

The government of Saint Lucia has suspended the six percent service charge on imported goods that are price controlled in an effort to keep the prices of these goods affordable for Saint Lucians.

However, this cost-cutting measure is short-lived, as Permanent Secretary at the Ministry of Trade and Consumer Affairs Sophia Alfay-Henry explains.

“I take this opportunity to further explain how the measure will work. The Ministry, through the Department of Consumer Affairs, is responsible for monitoring the import, prices and sale of a group of goods which the government considers necessary to the daily subsistence of the average consumer and to help in the development of key sectors.These goods are called price-controlled goods and include oil, milk, tuna, crackers, sardines, baby food (and ) cement They are controlled either by a specific wholesale and retail margin or by a fixed price.

The measure applies to all goods controlled by a specific brand. For example, milk, powdered and evaporated, attracts markups of seven and a half percent and ten percent on wholesale and retail respectively. The prices of all price controlled products are approved by the Department of Consumer Affairs, therefore the prices of these products in supermarkets, small shops or any retail/wholesale outlet must not exceed the approved prices by the department,” Alfay-Henry said. .

She added that the short-term measure, first announced by Trade Minister Emma Hippolyte, will apply to goods imported from June 1 to August 31, 2022. There will be no application of service charges by the Customs and Excise Department.

Additionally, goods already imported and either in warehouses or on retail shelves were priced using the 6% service charge. These prices will remain until the goods are exhausted.

“If the landed price of the imported goods remains the same since the service charge will not be applied and the mark-up is fixed, then the price to the consumer will be lower. There are 13 items that are currently under price control for a specific size,” Alfay-Henry said.

“For example, corned beef: only the seven ounce was controlled and not the biggest. As of June 1, 2022, the import of all sizes of goods under the price control order will now be subject to price controls, however, a further review of the sizes of these goods is in progress and an update will be provided in due course,” the permanent secretary said.

Saint Lucians have taken to Facebook to lament the rising cost of goods and services in the country. Some argue that the suspension of the 6% service tax on imported goods subject to price control is not enough to dampen or lessen the pressure on the rising prices of goods and services.