Taxing online purchases will not deter consumers

PHILIPSBURG–One St. Maarten People Party (OSPP) says taxing online purchases will not deter consumers from purchasing their necessities via the Internet as it will still be cheaper than purchasing from stores in St. Maarten.

The party said in a press release Sunday that it had informed Finance Minister Richard Gibson that imposing any type of tax on the importation of goods purchased online “would not deter the public from buying those products.”

OSPP was reacting to recent statements made by Gibson that imposing the six per cent Turnover Tax (ToT) on goods bought online was being considered. Gibson said too that local businesses had been complaining about decreases in businesses with some saying that business has plummeted by as much as 30 per cent.

OSPP said it is very concerned to hear “about such a reduction in business because most of the time this also results in the loss of jobs, a very scarce commodity now in St. Maarten. And, most of the time it is our people that are the first to be affected by the loss of jobs.”

OSPP said, however, that even if a six per cent ToT is imposed on goods bought online, the cost of these products would still be lower than the prices that these same products are sold for at stores in St. Maarten. They also noted that consumers believe that “most” of the products purchased locally, particularly electronic items are refurbished.

In its letter to Gibson, OSPP questioned how the Finance Ministry planned to introduce the tax, and if the tax imposed is ToT then it has to be part of the selling price and the seller from the country of origin of the products would have to collect the tax and pass it on to government. “This is very unlikely. If the airport and the harbour are assigned to collect this tax then it is a sales tax,” OSPP said. The party also queried whether St. Maarten has legislation in place for this.

“One other way to collect this tax that the Minister of Finance is proposing would be in the form of an import duty. Is the Government of St. Maarten willing to introduce import duties on these products only? If the answer to this question is yes, then we would like the Government of St. Maarten to also consider our proposal to introduce an import duty on alcohol and tobacco. During the 2016 budget debate, we submitted various motions to the Parliament of St. Maarten including one to implement an import duty on alcohol and tobacco. Studies in the Netherlands have indicated that the increase in the cost of health care is attributed to the excessive usage of alcohol and tobacco. We believe that this may also be the case in St. Maarten, however, no studies have been conducted in this area as yet,” the party said.

OSPP said it sent its motions to Gibson including the installation of parking meters in the Philipsburg area; a government tax for garbage collection; the setting up of the St. Maarten Sports Lottery and the implementation of some sort of import duties on alcohol and tobacco amongst others. “We also suggest to the minister to consider reducing the cost of energy to the businesses and the rates that they are charging for containers at the harbour. These savings would be passed on to the consumers.

“NV GEBE and the Harbour Group of Companies are owned 100 per cent by the Government of St. Maarten, and by extension the people of St. Maarten. Let’s not punish our people, but let’s improve on the quality of their lives by reducing the cost of living to start with,” OSPP said.

Source: Daily Herald Taxing online purchases will not deter consumers