By NATARIO McKENZIE
Tribune Business Reporter
EXEMPTING web shops from taxation was yesterday branded a “big mistake”, a leading businessman telling Tribune Business that the industry could generate $200 million or half the revenue the Government hopes to collect from Value-Added Tax (VAT).
Ethric Bowe, head of the Carmichael Business League, and president of Advanced Technical Enterprises, said: “The people are operating an enterprise and they’re making lots of money. Some estimates go as high as $400 million a year.
“They have no issue with being taxed. They are inviting the Government to tax them.”
Draft VAT legislation seen by Tribune Business shows the problems created by the Government’s failure to legalise, regulate and tax the webshop industry.
While “games of chance, gambling and lotteries” are designated VAT ‘exempt’, the legislation makes clear this only applies to casino gaming or activities licensed under the Lotteries and Gaming Act. This, once again, leaves web shops outside the tax and regulatory loop.
“The way I see it, if we get $0.24 cents off every $1 that goes across the table, we should have taken in over $100 million already. That’s half of what they’re trying to raise with VAT, with money that’s already in the system,” Mr Bowe said.
“Plus, when you look at them being able to put their moneys in the bank and do business with their money, the whole economy would become a lot more vibrant. I believe it’s a big mistake for us to just ignore that. I would take advantage of that right away because it’s the easy one to do, and it will buy us time in order to consider what else we need to do.”
In January 2013, the Government held an ‘opinion poll’ on whether to regulate the numbers industry. That was rejected, and Prime Minister Perry Christie subsequently announced that all webshops must close with immediate effect.
Webshop owners, however, filed an injunction to block any move by the Government from interfering with its operations. The substantive case has not yet been heard.