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Firms Withdraw Challenge To Trinidad's E-Commerce Tax

by Mike Godfrey, Tax-News.com, Washington

25 July 2017


A legal challenge mounted by a number of courier companies to Trinidad and Tobago's new online purchase tax has been withdrawn.

The levy of seven percent was announced in last year's mid year budget review and took effect from October 20, 2016. It taxes purchases of goods and services through the internet from retail companies resident overseas, such as Dell, Walmart, Staples, and Amazon.

When the levy was announced, the Minister of Finance, Colm Imbert, said online purchases were a significant area of foreign exchange demand, and this was putting a strain on the territory's reserves because credit card transactions are settled almost immediately.

The 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 in competing with overseas retailers.

The withdrawal of the challenge to the territory's online purchase tax has been characterized in some quarters as "influenced by fear of victimization." The territory's Ministry of Finance has strongly rejected this assertion saying that it is satisfied the courier companies withdrew from the litigation in the face of the strength of the detailed written submissions filed by the Ministry.

The Ministry said two of the six courier companies, who were initially part of the group mounting the challenge, had withdrawn prior to the trial, and at much earlier stages. The Ministry also said the claimant courier companies had not been asked to pay the government's legal costs.

TAGS: Finance | tax | sales tax | commerce | law | budget | Trinidad and Tobago | internet | legislation | retail | services

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