It's an ac­tiv­i­ty that us­es mil­lions of dol­lars in for­eign ex­change an­nu­al­ly and–with the coun­try's tight for­eign ex­change sit­u­a­tion–lo­cal busi­ness groups have been lob­by­ing the Gov­ern­ment to crack down on it. When he pre­sent­ed his mid-term bud­get re­view on Fri­day, Fi­nance Min­is­ter Colm Im­bert an­nounced the im­po­si­tion of a sev­en per cent tax on on­line shop­ping.

Im­bert first hint­ed at the tax last Oc­to­ber dur­ing a post-bud­get dis­cus­sion with the Amer­i­can Cham­ber of In­dus­try and Com­merce of T&T (Am­ChamTT) when he re­vealed that the then new­ly elect­ed PNM Gov­ern­ment had re­ceived pro­pos­als from the busi­ness com­mu­ni­ty to in­tro­duce the mea­sure.

In his pre­sen­ta­tion to Par­lia­ment last Fri­day, the min­is­ter said on­line pur­chas­es in US dol­lars put a strain on the coun­try's for­eign re­serves to the tune of "US$1 mil­lion a day." He said there was prece­dent for a tax on on­line shop­ping from the Unit­ed States and New Zealand. The mea­sure, he said, will not on­ly help man­age the coun­try's for­eign re­serves but will give lo­cal busi­ness­es a com­pet­i­tive ad­van­tage.

The sev­en per cent tax will take ef­fect in Sep­tem­ber fol­low­ing dis­cus­sions with banks and cred­it card com­pa­nies, Im­bert said.

Thou­sands of mid­dle and up­per class cit­i­zens reg­u­lar­ly surf the net to make In­ter­net pur­chas­es, en­ticed by sales and bar­gains which make items far cheap­er than what is sold lo­cal­ly.

One on­line shop­per Mala said: "The fact is that I can get what I want cheap­er. I will pay for it with my cred­it card, send it to a US ad­dress and it will be shipped to Trinidad. I pay tax­es and du­ties but the cost I pay is still less than the cost of the prod­uct lo­cal­ly."

She said she reg­u­lar­ly pur­chas­es cloth­ing and shoes for her fam­i­ly and, at Christ­mas time or for birth­days, she makes more high-end pur­chas­es, in­clud­ing elec­tron­ic items.

An­oth­er on­line shop­per, Cheryl, felt it was "un­fair that the Gov­ern­ment would want to tell me how to spend my mon­ey."

Cheryl said the sev­en per cent tax "is just be­ing put to sat­is­fy the peo­ple who helped them win the elec­tion. Is poor peo­ple like me who will be af­fect­ed."

But she's wrong. It's not just peo­ple like Cheryl or Mala who will be af­fect­ed. Some busi­ness peo­ple find it cheap­er to pur­chase their stocks on­line. A spokesman for a lo­cal couri­er com­pa­ny that clear goods pur­chased on­line told the Busi­ness Guardian some busi­ness­men have been mak­ing ex­ten­sive use of the fa­cil­i­ty be­cause it is cheap­er. Busi­ness­es al­so use couri­er ser­vices to im­port med­i­cine and oth­er pro­duc­tion in­puts.

How­ev­er, this does not mean that they don't pay tax­es. They are charged du­ties and VAT as well as the cost for ship­ping. The ship­ping charge is cal­cu­lat­ed ei­ther by weight or the di­men­sion of the pack­age, which ever is greater.

Cheryl said she will now be pay­ing tax twice.

"The goods I used to buy be­fore I will no longer be able to af­ford be­cause on top of du­ties, if I have to pay the ad­di­tion­al sev­en per cent tax, it will be too ex­pen­sive."

Couri­er com­pa­nies have made it eas­i­er for cit­i­zens to shop on­line. They reg­is­ter for free, shop at any US Web site and the pack­age is de­liv­ered. The shop­per is pro­vid­ed with a US ad­dress where the goods are sent when pur­chased and there is on­line track­ing. Once shipped the goods get to T&T with­in two to three work­ing days.

TTPost al­so of­fers a couri­er ser­vice. EZone is an in­ter­na­tion­al pri­vate mail box ser­vice that al­lows cus­tomers to have their on­line pur­chas­es de­liv­ered to a Mi­a­mi or UK ad­dress, air or sea-freight­ed to T&T, then de­liv­ered via TTPost.

In a state­ment last Oc­to­ber, Am­ChamTT cau­tioned against an ad­di­tion­al tax on on­line shop­ping. The busi­ness group said im­pos­ing ad­di­tion­al tax­es on on­line shop­ping would not de­ter it but in­stead "run it un­der­ground and dam­age a thriv­ing in­dus­try."

Am­ChamTT ac­knowl­edged that "cred­it card pur­chas­es are a first call on our for­eign ex­change. The banks au­to­mat­i­cal­ly ho­n­our any cred­it card pur­chase that is made for on­line shop­ping and it is al­ways in a for­eign cur­ren­cy."