The Ministry of Finance confirmed Thursday that services for the month of July onward will attract the new 12 per cent value-added tax (VAT) rate, even if those services are paid for in June.
Yesterday Eyewitness News shed light on a concerned consumer, who claimed she was charged 12 per cent VAT when she attempted to pay on her insurance policy, which expires in July.
The ministry released a statement advising the public that, pre-payments on July insurance premiums or any other service for the month or July or later, will attract the new VAT rate, even if it is paid before July 1.
Finance officials reasoned that charge is being assessed ahead of time as the service will be consumed during a period in which the new VAT rate is effective.
Officials said the charges are consistent with how the law on VAT has been setup from its inception in 2015.
Head of the business community Edison Sumner called the decision unfortunate.