By JANELLE DE SOUZA
April 10, 2016 – newsday.co.tt
The seven percent levy on online purchases of goods and services scheduled to take effect by September will probably not slow down online shopping simply because local prices are too high.
Some regular online shoppers to overseas retail companies questioned the move by the Government to further tax online shoppers as they already pay a 20 percent duty and Value Added Tax on these items when they arrive in the country.
Finance Minister Colm Imbert announced the levy on Friday during the presentation of the Midyear Budget Review, saying the tax was intended to help manage the increase in foreign exchange outflows from online purchases, reduce revenue leakage, and assist local manufacturers and service companies to compete with overseas retailers.
However, Cherisse Toussaint of Macoya said that reasoning was not justifiable as the “foreign exchange leakage” was an “unfortunate side effect” of the exorbitant mark-ups many companies make.
“If local companies were more reasonable with their profits, that would make them more competitive with the foreign retailers. I buy the same things online that they want charge three or four times the price in their stores,” she said.
She added that seven percent may not significantly increase her budget unless the item was particularly costly, and that the item would still probably be significantly cheaper and of better quality than if it were purchased locally.
However, she still believed the levy was unfair to the average person as online shopping “levelled the playing field” for those who could not afford to purchase certain goods locally. A St James mother of one agreed with Toussaint saying she believed the levy was made at the insistence of the business community whose profits were being cut because of online shopping.
“Currently, I pay about 36 percent in taxes and customs, and it’s still cheaper than buying in Trinidad most times. Even before this news I decided that I would buy a plane ticket and go to physically shop abroad instead. The extra seven percent just gave me the extra push to do it,” she said.
She added that not only were the mark ups of local retailers too high, but that, many times these retailers carry inferior or bootleg products.
Instead, she said Government needed to put something in place to regulate the prices of local merchants and ensure the quality of the goods.
“I understand that the country is in a deficit but the amount of taxes and increases are too much. When oil was at $100 per barrel, the government should have put things in place. But then, as well as now, politicians only care about securing themselves and making the pockets of their family and friends fatter,” she said.
Small business owner, Junior Pierre, also believed an additional seven percent tax would not solve the problem of local competitiveness or foreign exchange outflows.
He said Government could only encourage people to buy local if prices were competitive, that if the online savings were minimal, then people would probably not go through the hassle. Pierre noted he bought numerous items online over the years including electronics, promotional items for his business, clothes, computers, equipment such as power tools and printers, and even car parts.
http://www.newsday.co.tt/news/0,226325.html
Online purchases get 7% tax starting from September
A levy of 7% on online purchases of goods and services through the Internet from retail companies resident overseas, that are not subject to taxation in Trinidad and Tobago, such as for example, Dell, Walmart, Staples and Amazon. This is not a new concept and there is well established precedent for a tax of this nature in countries such as the USA, UK and New Zealand. Online purchases are now a significant area of foreign exchange demand, which is putting a strain on our reserves, since credit card transactions are settled almost immediately. This tax is intended to help manage the increase in foreign exchange outflows from online purchases, reduce revenue leakage and assist local manufacturers and service companies to compete with overseas retailers. This measure is scheduled to take effect by September 2016 and it will require discussions with the banks and credit card companies to make it work.
Not all in praise of Govt’s online shopping tax*
FORMER president of the Supermarkets Association Balliram Maharaj is lauding the government for its decision to impose a seven per cent tax on online shopping, saying it will protect local businesses from unfair competition. But president of the San Juan Business Association Vivek Charran says even though he stands to benefit from such a measure, it will reduce the quality of life of many people in the country.
Main issue is, this tax solves nothing (but putting free money in the government’s pocket), people are still going to shop online because it’s cheaper, small businesses are going to suffer because they too buy online to resale locally (which means their cost just increase 7%) and more importantly than any of that is that there’s no measure in place to produce goods locally in order to provide an alternative to the online shopping.
I don’t mind paying taxes, but when 25% of my salary doesn’t even make it to my pocket, I have to pay 12% on any little thing I buy, and on these same items I’m also paying anywhere from 10 to 30 per cent import and duty tax (because yes, companies have to pay these costs and then pass it on to the consumer), and in turn, going to the hospital is a nightmare, infrastructure is basically non-existent, public schools are quickly becoming a non-option, and crime seems to be the only business taking off (with the exception of being a politician) then explain to me what this 7% hidden devaluation is supposed to do to improve my life?
It seems that the 7% tax on online shopping will simply push some people to buy plane tickets instead to make shopping trips to Miami & New York. People will always search & find alternative ways to acquire what they want and the foreign exchange will still be spent. Will Government close down PriceSmart next because PS alone consumes approx US$200m per annum to bring in foreign goods.
http://www.newsday.co.tt/news/0,226406.html
Good griefs, & dis is getting beyond ridiculous now folks, ain’t it? Would someone tell Dr Kieth, or Finance Minister Colm Imbert, that they cannot do de South Asian Tassa whine ,Afro-Limbo dance , Middle Eastern .. ummmm ….Syrian/ Labanese belly dance ,English Fox trot ,Brazilian Samba ,Cuban Salsa,and Dominican Republican Bachacha / Merengue ,all at de same time.
Hey guys quit ‘te-te veying ‘/ ‘beating around de bush ,’ as we like to say on de streets, and lead!
Let the chips fall where they may, if the end game , is really to halt the socio political bleeding that exist today- the result of vast political , and economic mismanagement , by the greedy , self serving bandits , that were Kamla, and her Carbal controlled,UNC dominant PP goons.
There is nothing worst than indecisive leadership , and yes, it sends mixed / wrong messages to the populace.
It might sound like a contradiction on my part, but let me add, dat if these PNM blokes , keep up this idiocy, citizens ,would soon begin to get nostalgic,for the more steady hand of Auntie Kay, their Siparia Hindustandi Queen, who acted decisively, and did not in the words of Papa Deffy Eric,….care which…..ummm…”darm dog bark.”
Here is a list of her more noteworthy accomplishments:-
1.Three Agua patrolling Ships , were earmarked for our Coast Guards , to keep our borders safe from transshipment entry of illegal immigrants, illicit drugs, deadly guns / otra small arms, and in one swoop , after swearing in on her Bagwas Gita, Auntie K ,and the amorous -goat adoring clueless / overatted legal hombre , turned glorified AG ,in un-electable -Rammy Anan, decided, to scrap the deal , thus saving T&T $20,000, and paying out more like $400 million , to prevent law suites by angry Euro Ship manufacturers. Did I mention, that hundreds of careers got destroyed , as millions were wasted to send folks abroad to be trained , only to have them yanked back home to….., well heaven knows what.
2. Two days after she gave the green light , to the Indian Expo business … ummm…consortium, to have what looked like a 8 year, nonstop T&T / India -trinkets trading deal, and simultaneously telling CARICOM leaders , that ‘there would be no more blank checks ,’emanating from ‘Money Tree La Trinity,’ Antie Kay,made some pitiful ,tribal , semi educated , young party hack ,named Reshmi Ramnarine, the head of our entire National Security Operations-SIA-then at de other end of the National Security spectrum , proceeded to select a White Canadian , to Lord over our Police Service ,after paying him twice as much as all the dark skin Commissioners, that succeeded Tony May- which she ,and her micro managing goons , tried to manipulate, even to the point of instituting a neo racist/ unconstitutional Curfew , that saw the arrest ,and detention of thousands of ‘Little Black boys ,’ while a criminal ,party financing business bloke , who was caught – to put it mildly -with his ‘weenie in a zipper,’ in containers laden , with drugs , and chickens , was given a free pass.
She then gave a decree, to hire at least quarter million , simi criminal , under trained SRPs,then demand they do all the work , that fully trained officers , are expected to perform, then act surprise , when crime figures still sky rocketed.
3. She constructed a walk over for the one time ,future Capital of T&T , in Chagurnas, with plans to also construct a Mall, Children’s Hospital, and high end hotels.
However in revengeful , ungrateful thrush ,ummmm, fit of rage — at once exulted ,Queen Maker -Jack- FIFA- Warner, she reneged on the deal , and shifted said hospital, to Couva , all because the voters , had the temerity ,to defy the UNC wishes, and instead, showed support ,to their hard working MP, as a sign of gratitude.
Yeah, and thanks Uncle Deyalsingh , for bringing us up to speed ,on this , since , as expected , no records of such revengeful / vindictive actions could be found anywhere in T&T Hansards.
http://www.newsday.co.tt/news/0,226330.html
Look folks, let me reiterate , I don’t wish to bore readers with this , but in de words of … well… who else , but my late , extremely wise , Tobago Granny , one must ‘give Jack his Jacket, and Jim his Jim boots .
When it comes to decisive leadership, ummmm… stewardship, Antie Kay , was second to none, some say.
Ain’t too certain, if the voters appreciated it then , but they sure will come around , if de Right Honorable Dr Keith Rowley- MP for Westmoorings , and we can throw in Caranege, and Bagatelle Diego Martin too – continue along this part, hmmmm?
Stay vigilant T&T!
Your influence counts , use it , I say, si?
AmCham says no to 7% online tax*
THE American Chamber of Commerce (AmCham) of Trinidad and Tobago has suggested to Government that instead of imposing a seven per cent tax on all online goods, purchases that are less than US$200 should be duty free.
Speaking at a mid-year budget review forum, held at the Hilton Trinidad Conference Centre, St Ann’s, yesterday, AmCham president Ravi Suryadevera maintained that the chamber was not in support of Government’s move to impose the tax on online shopping, starting from September this year.
“We are in favour of the de minimis for the jurisdiction—anything under US$200 should be inbound, duty free and VAT free,” he said.
E-shopping levy not a right click
Wednesday, April 13 2016
THE GOVERNMENT is proposing a seven percent levy on online purchases. Shoppers have described the move as unfair, but Minister of Finance Colm Imbert has defended it, saying it would ease foreign exchange pressures, reduce revenue leakage, and divert buyers to local products. But not so. The levy is one tax too many.
E-shopping does place immediate pressure on the foreign exchange market. According to Imbert, it totals US$900 million out of the US$7.3 billion in foreign exchange transactions annually.
That’s about 12 per cent, a figure not to be sneezed at. But there is no evidence to suggest imposing the levy will ease the problem.
In the first place, it is unclear what impact an additional seven percent charge will have on consumer habits. Some shoppers have already stated they will continue to shop. Who would not? Online merchants offer a better and wider quality of products and at better prices. How was the seven percent quantum determined? Even if some shopping is discouraged, in the long run this may have little impact on foreign exchange pressures. That is because the largest consumers of foreign currency are retailers who import. The biggest users of foreign currency are: PriceSmart, Courts, Smith Robertson and Company, AS Bryden, and Massy Distribution. Cutting off the purchase of commodities on the net will divert shoppers to these retailers. In the process, the small man loses value for money, the big fish gets more profit.
While the State argues the levy could assist local manufacturers and service companies to compete with overseas retailers, this is based on wrong assumptions. Firstly, the quality of local commodities are not comparable. Secondly, the manufacturing sector is not yet developed to sustain such demand.
Thirdly, service standards in local shops remain poor.
Still, we welcome Minister Imbert’s setting of a clear timeline of implemention for the proposal.
The five months until September will be used to iron out details of the levy – such as the threshold to be used to attract a charge, whether intangibles such as services sold by Netflix and iTunes will be included and whether items such as critical medical supplies should be exempted. However, the whole point of serving notice five months in advance is to warn consumers as to what is coming. If we are unclear about the fundamental details of the levy now, a five-month notice, while better than nothing, is ultimately rendered nugatory.
The levy is one tax too many not only because it is ill-suited to the policy aims outlined by the State.
It also results in a bizarre situation where a seven per cent charge is to be imposed on items for which buyers already pay 20 per cent duty and Value Added Tax (VAT). We agree that the country needs some bitter medicine. But with workers on the breadline, land and building taxes coming back, the fuel subsidy stripped down, more taxes on alcohol, tobacco and gaming, the expansion of the VAT regime, freezes on salaries, and backpay deferred, the burden is weighing too heavily on the ordinary man. This levy is gratuitous: it is not a right click.
Instead, the State should focus on combatting the leak of foreign currency via Chinese businesses that have recently set up shop and that are remitting US dollars to mainland China. Also, better revenue collection can be achieved by bolstering agencies such as the Board of Inland Revenue. In a global world, local firms must up their game. Competition from online shopping might be more beneficial than protectionism.
Prime Minister Dr Keith Rowley on Friday called on citizens to tolerate “small pains” as an alternative to big pains down the road.
But with a $15 billion deficit, will taxing e-shoppers stave off the International Monetary Fund?
http://www.newsday.co.tt/editorial/0,226448.html