The American Chamber of Commerce of Trinidad and Tobago (AmCham) has called on Government to reconsider the seven percent tax on online shopping imposed by Finance Minister Colm Imbert in the 2017 Budget last Friday.
At a post-Budget forum hosted by AmCham at the Hyatt Regency, Port-of-Spain, on Tuesday, its chief executive officer, Nirad Tewarie, said AmCham was against the tax which he said would damage the legitimate part of an industry which is trying to ensure that the entire industry is legitimate and that there are no illegitimate people bringing in things on which the Government does not even collect the value-added tax and duties.
And he said having the tax only on items brought into the country by air freight suggests there is more in the mortar than the pestle.
He called on the Government to clarify its intentions toward the online shopping sector.
The president of the Chamber, Ravi Suryadevera, was more pointed, expressing disappointment that Imbert implemented the tax without consulting AmCham as Suryadevera said he had promised.
He said the body was “disappointed that the minister announced the online tax without consultation as he committed to discussing with AmCham and other stakeholders prior to the Budget.
“AmCham TT does not support this tax, as we believe that this tax would not assist the Government by means of addressing foreign exchange demand nor raise material revenue, but rather it can be unnecessarily inflationary, as many businesses use online shopping for raw materials and machinery.
“Fresh produce and medication are brought into this country via air freight daily.” He also said AmCham had made recommendations on measures to enhance business and stimulate trade and investment.
“We also underscored the importance of curtailing expenditure while simultaneously addressing the challenges faced in revenue collection. In this regard, we do not think the Government did enough to reduce expenditure.
“The reduction in transfers and subsidies, particularly restructuring the URP and CEPEP programmes, has long been advocated for by AmCham TT, not only by way of its financial footprint but also the counter- productive effect subvention labour programmes have on the workforce.
Am- Cham is concerned that sufficient action has not been taken to give effect to reducing these expenditures to sustainable levels.” However, he said AmCham fully supported the creation of the Revenue Authority but had no details about how the Government planned to make it a viable entity.
“This we believe is crucial in realising the revenue potential proposed in the national Budget… A well-staffed and efficient Revenue Authority can now operationalise and prioritise policies for identifying and collecting tax from unregistered businesses.” He said the Chamber also supported the review of the petroleum tax regime including the Supplemental Petroleum Tax but was disappointed in the introduction of the 30 percent increase in Corporation Tax on chargeable profit of one million dollars.
He said this tax would hamper the Government’s thrust of developing entrepreneurial activity and the higher effective tax rate will act as a disincentive to new investment.