By Sandor Panton, Contributor
IN OPENING the 2003/2004 budget debate, Finance Minister Dr. Omar Davies announced that a number of items that were either zero-rated or exempt from General Consumption Tax (GCT) would, as of May 1, be included in the tax net. Of particular interest to those of us who have come to depend on the Internet for many things, including our livelihood, was the removal of the GCT exemption on computers and computer parts, and the increase of the GCT on telephone services (from 15 per cent to 20 per cent).
It is not ridiculous to ask whether or not these tax changes are 'anti-Internet', because it is very easy to see the sort of negative impact they will have on Jamaica's cyber-population.
'IMPORTANT BENEFIT'
It was all praise to the Government in 2001 when, as it sought to encourage more Jamaicans to use the Internet, it removed the GCT on computers and computer parts. Minister of Industry, Commerce & Technology, Phillip Paulwell, was quoted in a Gleaner article on Tuesday, May 1, 2001 as saying that the removal of the GCT from those items "was an important benefit to the public, as it would admit 'ordinary persons' to the information highway and would encourage overseas donors, who were concerned about duties."
The about-face by the Government on this matter only leads me to believe that the Internet is no longer seen as an important aspect of whatever strategies they may have for the growth and development of the island. But why would they do this? E-commerce alone could be one small aspect of a larger Internet strategy that could possibly reap more long-term benefits for the country than simply tacking new taxes on certain items.
For example, there are thousands of web sites that are owned and operated by Americans, Koreans and numerous other non-Jamaicans that are peddling everything from Blue Mountain Coffee to Bob Marley posters and Reggae Boyz T-shirts. Shouldn't the Government be looking to encourage more locals to get into the online game in order to channel some of the millions that are being made off Jamaican products on the Internet back into the island? Then, maybe they can look to tax this income.
The impact of the re-implementation of this tax is undeniable individuals with dreams of being Internet entrepreneurs, young people hoping to learn various software and programming languages, companies looking to improve their efficiency, even schools that want to have additional computers for student use will all have to re-assess budgets and plans, and in some instances, scrap these plans totally.
With that out of the way, if you do go ahead with your computer investment, and if you are like many of the Internet users in Jamaica, you will need to use a telephone line (dial up) to access the Internet. Dial-up Internet users must utilise Cable & Wireless' telephone service (in the form of a telephone call) in order to connect to their Internet Service Provider. The GCT increase on such calls means that dial-up Internet users will now be spending more money to access the Internet.
STILL WAITING
In the past, the Government made many promises regarding the Internet. We're still waiting to pay income tax, driver's license fees and other statutory obligations via the web; still waiting for online real-time processing of Jamaican dollar and foreign currency credit card transactions via Jamaican banks, and now we're faced with a new round of taxes that goes against the grain of so many of these promises of the past.
Sandor Panton is an Internet specialist and consultant. If you have any comment, contact him at feedbackjamaica-gleaner.com. This series is brought to you by www.go-jamaica.com, the portal website of the Jamaica Gleaner.
