One of Labour’s big election promises is to take the 15 per cent goods and services tax (GST) off fresh and frozen fruit and vegetables from April 2024, if re-elected.
That would mean savings of about $4 a week, on an average spend of $30 in the fruit and vegetable section.
The determining factor for which products are covered, and which are not, is whether there has been any processing; so the exemption would not apply to “canned and dried items, or to juices”, according to the guidelines released with Labour’s policy.
Reference to “zero-rated” means no GST applied.
Frozen mixed vegetables would avoid GST, however “potatoes mashed into chips, coated in canola oil and then frozen would be excluded and would still attract GST”.
A list was run past Labour leader Chris Hipkins at the weekend’s policy launch.
The jury was out on dried or semi-dried tomatoes.
Bags of mixed lettuce and mixed frozen peas and corn would be exempt.
The GST policy would cost the government about $2 billion over four years, made up in part by cancelling a Covid-related depreciation for commercial property owners.
Labour says it is a targeted way of easing the cost of living pressures and stacks up well against the National Party’s tax plan.
Credit: sunlive.co.nz
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