by Nisha Paul

• Traffic congestion in commercial areas, particularly St George’s and Grand Anse
• RGPF referred traffic management enquiries to Grenada Transport Commission
• Private-sector representative in Upper House described exercise as successful

Retailers report increased customer traffic, while shoppers give mixed accounts of savings during Grenada’s first Value Added Tax (VAT)-free shopping exercise.

The first VAT-free shopping weekend drew large crowds to supermarkets, hardware stores and other businesses on 28 and 29 August, with retailers reporting increased customer traffic and shoppers turning out to take advantage of savings on selected goods.

The increased activity also brought traffic congestion in commercial areas, particularly St George’s and Grand Anse. While one shopper reported saving hundreds of dollars on building materials, another questioned whether some prices had actually fallen during the exercise. The 2-day initiative forms part of the government’s EC$18 million Cost of Living Assistance Programme, which is aimed at providing relief to consumers while stimulating activity in the retail sector.

Private-sector representative in the Upper House of Parliament, Salim Rahaman, described the exercise as successful despite some “human and system challenges” experienced by businesses, “which were sorted out and corrected”. Rahaman said VAT-free shopping days are not a new concept, and have been used in other countries, including the “United States (as a relief measure) for at least over a decade.”

Under the initiative, the 15% VAT normally collected by VAT-registered businesses on behalf of the government is not charged on select goods during the designated shopping days.

According to Rahaman, as retailers seek to attract customers and increase sales, some have also added their own discounts, allowing consumers to benefit from savings beyond the VAT exemption “so that customers get more.” He added: “And, I think we would see more of that in the upcoming VAT-free days.”

The heavy turnout placed additional pressure on roads and parking areas in major commercial centres.

Rahaman said congestion was experienced in both St George’s and Grand Anse, with “supermarkets and hardware stores” among the businesses attracting the largest crowds. “It reminded me of Christmas or Carnival,” he remarked.

When contacted, the Community Relations Department (CRD) of the Royal Grenada Police Force (RGPF) affirmed that it had no specific measures in place to manage the influx of vehicular traffic during the VAT-free shopping days. The department redirected enquiries regarding traffic management to the Grenada Transport Commission (GTC). Efforts to obtain feedback from the commission on the traffic situation during the 2-day exercise have so far been unsuccessful.

As a result, it remains unclear whether the commission considered or implemented any additional traffic-management measures during the exercise, or whether the congestion recorded in major shopping areas differed significantly from normal Friday and Saturday conditions.

M&N Hardware reported increased customer traffic, with management describing the exercise as “well executed.” Foodland Supermarket remained open until 10 pm on the final day.

For some shoppers, the savings were significant. The potential benefit is particularly notable for consumers making larger purchases of eligible goods, including groceries, hardware, building materials and appliances.

One shopper who purchased building materials said the VAT-free exercise resulted in savings of up to “EC$2000.” But the experience was not the same for everyone. Another shopper questioned whether some prices had actually fallen during the exercise, saying some goods appeared unchanged while others appeared to have increased at a particular supermarket.

The contrasting experiences highlight the need for consumers to examine their receipts and compare prices to determine the actual benefit of the VAT exemption.

The initiative also comes at a cost to the government, which forgoes VAT revenue on eligible goods during the designated days. The Inland Revenue Division (IRD) within the Ministry of Finance will be expected to provide information on the amount of VAT revenue forgone during the first exercise.

Rahaman acknowledged that the measure could not be offered continuously because of the revenue implications. “It’s not something that the government would offer all the time because they are giving up revenue, but it is a targeted measure, and I believe it was very successful,” he added.

Two more VAT-free shopping days are scheduled: 25 and 26 September, and on 30 and 31 October. The remaining exercises will provide further opportunities to assess consumer turnout, retailer activity and the programme’s cost to the government.

For now, the first weekend has shown strong consumer interest and increased activity among retailers, but the extent of the benefit will become clearer as more information emerges on consumer savings, business sales and VAT revenue forgone.

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