Six companies are mounting a legal challenge to the implementation of the seven per cent online tax.
The application for leave to apply for judicial review was filed in the High Court on Wednesday, challenging the decision of the Finance Minister and the Government which became effective on October 20, last year. The fiscal measure was announced by the Finance Minister Colm Imbert in September, last year, during the reading of the 2016-2017 Budget statement. Imbert said then that the new tax will be imposed on purchases that arrive T&T through courier companies or brought in directly by individuals via air freight.
This measure, he said, was expected to raise an additional $70 million revenue.
The online tax will be “due and payable at the bonded warehouses before clearance of goods or directly to customs in the same way that VAT and customs duty are currently collected.”
According to the court documents, the claimants are asking the court to quash the imposition of the new online tax provisions.
In the interim, they are seeking an order to stop the imposition and implementation of the tax until the court makes a determination on the matter.
Six of the largest courier companies are named in the application including Web Source, Aeropost and Customer Service First Couriers Ltd.
One of their main concerns is that the Finance Minister acted illegally by failing to adequately consult with them before the new tax was imposed.
In fact, they are asking the court to declare that it was irrational, wholly unreasonable, disproportionate and an irregular and improper exercise of the minister’s discretion. The issue of discrimination was also raised by the companies. The seven per cent online tax does not apply to ocean freight, and according to them confers an unfair advantage on ocean freight companies which are their direct competitors.
In the absence of a quashing of the tax, they are asking that it is also applied to goods imported via ocean freight as they believe it is a violation of the principles of procedural fairness.
In one of the affidavits, the owner of Ecouriers Ltd said he lost routine customers who have chosen to ship items like televisions and advertising boards via ocean freight to evade the seven per cent online tax. Attorneys Keith Scotland and Gideon McMaster are seeking damages, interests and costs on behalf of their clients.