ANDRE WORRELL
Several courier companies were unable to make the necessary changes to their internal systems in time to accommodate the newly-implemented online purchase tax (OPT) which went into effect yesterday, causing hiccups between courier companies and customs.
Well placed sources in the courier industry said yesterday a number of freight companies ran into difficulty at the Piarco International Airport courier bond facility, where goods are cleared from customs.
The main issue arising was determining exactly how the seven per cent tax would be computed and applied to the landed items, the T&T Guardian was told.
“It appears that a couple companies did not have enough time to make the necessary adjustments to their processess and as such ran in to some issues calculating the seven per cent OPT,” a source said.
The source noted although it was announced in the recent budget, it was never defined clearly how the tax would be applied by customs.
“It was only at our meeting with the comptroller of Customs and Excise that it was made clear to us that the seven per tax would be applied to the CIF (cost, insurance and freight) value of the imported goods.
“Many companies did not have full knowledge of this. This makes calculating the tax easier but the challenge for some of the companies was that of having hundreds of goods to clear and not enough time to make the necessary changes in their systems,” the source added.
A number of courier companies eventually sent emails to their customers detailing the breakdown of the new online tax yesterday.
One company said in a customer email: “Dear valued customer, as of today, October 20, the Online Purchase Tax (OPT) has been implemented. This seven per cent tax would be charged based on the CIF value (Cost and Freight).
“The criteria for assessing this charge will be based on the following: (1) Goods must be purchased online; (2) Must be imported via airfreight; (3) The goods must be consigned to a consumer; (4) It must be imported via a transit shed, i.e. Courier Bond.
“The seven per cent would NOT be applied in certain cases: (1) Goods for commercial use; (2) Goods that were not purchased online (family or friends sending personal effects to you).”
Speaking during yesterday’s post-Cabinet press briefing Prime Minister Dr Keith Rowley made it clear the tax would remain.
“There’s a purpose behind taxation. The very people objecting to the tax might be the biggest beneficiaries at the outcome of the collection,” he said.
However, he admitted that the Ministry of Finance was a bit tardy in sending out the provisional order for the tax to be collected from yesterday.
Courier boss: not surprised
Commenting on the issues with clearing goods yesterday, head of the Courier Association of T&T, Paul Pantin, said he was not surprised.
“We (couriers) were hastily called to a meeting with the comptroller of Customs and Excise on Wednesday afternoon to be briefed about the online tax going into effect.
“It does not surprise me, therefore, that companies would have trouble treating with this, since it was not clear up until mere hours before the tax was to be levied.
“As a matter of fact, some companies even took the decision not to clear goods today (yesterday) until they received further clarification on when the tax would become law. Even customs officers were unsure of how the tax would be administered,” he added.
Pantin questioned the rush by the minister to force the tax through without giving courier companies time to adjust their operations in the face of unclear information.