In his mid-year review of the new government’s financial situation, Minister of Finance Colm Imbert noted…
Madam Speaker, when this Government presented the 2016 budget in October 2015, we had no illusions that we were in a difficult economic situation caused by radical changes in global energy markets, which led to a collapse of oil prices in 2015, and a consequent drastic reduction in revenues from petroleum. This difficult revenue situation was compounded by five years of mismanagement of our finances.
To that end, he has announced that among other austerity measures, in September, 2016, the Government will implement a seven per cent tax on goods purchased online using a credit card,,,
i) 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.
Read the full mid-year report here.
