Cha-CHING!!! Even the 'experts' are refuting the bullcrap our government has been spewing to the naive masses. NICE. Open your eyes people, demand the government put forth a formal plan for budget cuts, put forth the essential Freedom of Information Act BEFORE VAT , collect the revenues they are currently NOT collecting!! It's just easier for them to blindside the 'dumb' masses with a new tax, tell them what they want to hear.."yeah man, it's not going to impact food prices'...and just carry on with business as usual of spend spend spend, you scratch my back I scratch yours.

that would have been possible, had the vat refunds not been restricted to the percentage of vatable items.

Maybe they should first start by enforcing price control on these items...you can go one place get a loaf of bread for $4 go somewhere else and it's $6- mind you it's the same loaf of bread.

So as long as these supermarkets have the ability to adjust prices as they see fit of course they will attempt to recoup whatever tax they paid as well as make a profit. And who will pay the price- the consumer purchasing. And more likely it will be the middle income family who shops every week and purchases more than just simple generic bread basket items.

Exempting items will not have the effect of preventing price increases. This is because the overhead costs of transportation, storage and so on are subject to VAT that is not reclaimable. The VAT inevitably must be passed through to the customer even though it is not explicit on the invoice or bill.

There is no case to date where price controls have had any positive effect. The only effective control of prices is competition. It is purely a political gimmick falsely used to give the impression that prices will not rise.

Creating exemptions in VAT makes it extremely difficult to administer and enforce. The only viable option is to "zero-rate" items. This means that the VAT on overheads is reclaimable. While this would solve the issue that prices would need to rise on exempt items and the complications of accounting for exempt products; it would mean that VAT would have too collect the revenue elsewhere on non zero-rated items. Revenue does not come from thin air, the whole point of the exercise is to raise more revenue.

As Dr. Brash rightly pointed out zero rating items will create more benefit for the wealthier person than the poorer person because wealthier persons spend more. It is also wise to point out that wealthier individuals save more money and spend more overseas so they pay much less VAT as a relative proportion of their income. This is what makes VAT a very regressive tax.

The only established way of offsetting the regressive nature of VAT is to have income tax thresholds (but there is no income tax) or social benefit payments to the lower income sector through mechanisms such as child support benefits and so on.

I hope everyone realizes the most of the government claims on VAT are not factually correct. They are more designed to persuade people that VAT is good with little regard for the true facts. You will find that no government official has been or will be prepared to answer questions in an open debate (such as on radio or TV). They will only campaign for VAT on sound bites, press releases and web sites where they are in control of the message and the do not have to answer awkward questions. That says it all.