The Ministry of Finance has "taken issue" with a local cinema blaming its price increase on costs surrounding the implementation of value-added tax (VAT) and is encouraging consumers to challenge assertions connected to the price hike.
Prior to the implementation of VAT a movie ticket at Galleria Cinemas was $8.50. The cost has increased to $10.
Asked about the price hike, the company's general manger, Felton Capron, told The Guardian it came with "operation costs".
"There are certain things they want us to do," he said. "It comes at a cost."
But the Ministry of Finance said the increased outlays are recoverable.
"The Ministry of Finance takes issue with a statement by a local cinema that attributed a tax inclusive ticket price increase of 17.5 percent mostly to VAT-related costs," the statement said.
"The statement conveys a misunderstanding about VAT credits to which the cinema is entitled. These are recoverable outlays and not costs. The public is encouraged to challenge assertions which convey impressions that VAT is a significant cost for registered business. The tax is directly borne by consumers. When paid by the VAT registrant it is recoverable as credits."
On Monday, Price Control Commission Chairman E. J. Bowe said it is "outrageous" that Galleria Cinemas has added more than the 7.5 percent VAT for movie tickets.
"From my own observation, here I am reading what this business place is saying, that as a result of VAT adults will be charged $10," said Bowe, referring to a VAT notice posted on the company's ticket window at its Mall at Marathon location.
"Now just before VAT you had to pay $8.50 for tickets. You calculate 7.5 percent on $8.50 and add that on to it and that gives you $9.14. So that is the max, the ceiling. So now pray tell, where did the 86 cents come from?"
Bowe said the price disparity is "uncalled for".
"As I've said before, things are already tough for consumers, so my God, have a heart," he said.
"We all know that business people have to make a living, but don't make a living killing the poor people."
He pointed out that the cinema does not fall under price control, but said the complaints his department received about the VAT rate at the business had to be investigated.
VAT came into effect last Thursday at a flat rate of 7.5 percent with few exemptions.
The Ministry of Finance also advised that the public cannot be charged VAT by businesses that have not completed the registration process.
The proof of registration is the registration certificate with a tax identification number (TIN).
The TIN must be shown on all receipts issued and the certificate must be on open display. Businesses that issue VAT receipts without being registrants could face fines.

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