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Merchants prepare for new sugar tax rates

Lindo’s manager Zachary Moniz says sodas and sugary drinks will be most impacted by the sugar tax hike on Monday (Photograph by Akil Simmons)

Shopkeepers braced themselves this weekend for a hit from the sugar tax hike on Monday.

Products with sugar will havea 75 per cent duty rate from the start of next week.

Zachary Moniz, the manager at Lindo’s Family Foods in Warwick, said customs had only just sent out the files the store needed to update its systems to ensure the tax was paid at the new rate.

He added: “I’ve got people working on that today.”

But sugar-laden items like Easter eggs will be spared an increase as the new tax will affect only goods that arrive in Bermuda on or after April 1.

Mr Moniz said: “I’m not sure if there is confusion; it is just a waiting game.

“You need to know what tariff numbers will be impacted, so you can make the pricing adjustments.

“The clearance software has to be updated so we pay the right duty.”

When soft drinks, sweets and other items were hit by a 50 per cent hike in duty rates in October, merchants received details a week before the tax went into effect.

But Mr Moniz said: “This time that hasn’t happened.

“Customs will likely have sessions we can attend to find out what is impacted and how it is impacted.

“My main concern is getting the tariff duty for my software so I can start to clear containers this weekend, so I can get things off the dock as early as possible on Monday.”

Mr Moniz predicted customers would not be happy with the new duty rates.

He said: “With the last sugar tax hike in October, people were upset. There were arguments all over the place. I would imagine that people will be more upset now.

“Certain things that you didn’t know would be impacted fall under tariff numbers and the price goes up.”

Mr Moniz added many customers were confused over what prices would go up as a result of the sugar tax.

He said: “People were picking up Diet Cokes and saying the price went up.

“Drinks with artificial sweeteners instead of sugar, are excluded from the hikes.

“People were saying, ‘last week it was X price’, but it was on sale the week before.

“They were seeing the exact same price it was before it was on sale.

“People were accusing vendors of putting prices up when they didn’t need to go up, when in fact it was the normal process of things.”

He added the sugar tax would not impact other items in the store.

But Mr Moniz said: “Prices on other items will rise and fall as they always do anyway. Prices change as the vendor costs to us change.”

Mr Moniz added he was not in favour of the sugar tax.

He said: “I don’t know how much it will change people’s behaviour. For the Government, I guess it is worth a try.

“If the goal is to raise revenue, if you raise the price too high the revenue you get at 30 per cent, you won’t get any more because no one will buy it.”

Mr Moniz said he thought sales of sodas and sugary drinks would take the largest hit.

But he added: “People have been buying less soda for the last 20 years.”

Mr Moniz said he did not think there would be panic buying of chocolate in advance of the Monday tax increases.

He explained: “Chocolate is a spontaneous item. When you come in the store and feel like one, you buy it.”