Service charge

Explanation of Service Charge Suspension for Imported Price Controlled Goods

The permanent secretary of the Ministry of Commerce, Sophia M Alfay-Henry, explained the suspension of the 6% service charge on imported goods whose prices are controlled.

“Greetings from the Consumer Department of the Ministry of Trade, Industry, Business Development Cooperatives and Consumer Affairs. You may have heard the Honorable Minister Delegate for Trade and Consumer Affairs, Minister Emma Hippolyte inform the nation that the Government has approved the suspension of the 6% service charge on imported goods with price controls, as a short-term measure to cushion or “relieve the pressure” on consumers due to rising prices of goods and services.

I take this opportunity to explain in more detail how the measure will work. The Ministry, through the Department of Consumer Affairs, is responsible for monitoring the importation, pricing and sale of a group of goods which the government deems necessary for the daily subsistence of the average consumer and to assist in the development key sectors.

These goods are called price-controlled goods and include oil, milk, tuna, crackers, sardines, baby food and cement. They are controlled either by a specific wholesale and retail margin or by a fixed price. The measure applies to all goods controlled by a specific margin; for example, Milk: Powdered and Evaporated attract markups of 7 1/2% and 10% on wholesale and retail respectively.

Prices for all price-controlled products are approved by the Department of Consumer Affairs. Therefore, prices for such goods in supermarkets, small stores or any retail/wholesale outlet shall not exceed Department approved prices.

The short-term measure announced by the Honorable Minister Emma Hippolyte will apply to goods imported from June 1 to August 31, 2022. Goods already imported and either in warehouses or on retail shelves have been priced using the fees service charge of 6%. These prices will remain until the goods are exhausted.

Price changes are expected for goods imported from June 1. There will be no application of service charges by the Customs and Excise Department. If the landed price of the imported goods remains the same, since the service charge will not be applied and the mark-up is fixed, then the price to the consumer will be lower.

There are 13 items that are currently under price control for a specific size; for example, corned beef, only the 7 ounce was checked and not the larger size. From June 1, 2022, the import of goods of all sizes under the Price Control Ordinance will now be subject to price controls. However, further review of the sizes of these commodities is ongoing and an update will be provided in due course.

I urge all importers and consumers to contact the consumer department on 468 4224, 468 4225, 468 4226 and 468 4229 with any questions or concerns.”