Friday, March 29, 2024

Abolish this hated tax!

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The great duty-free shopping spree has come and gone, and the beleaguered, impoverished and bewildered Barbadian shopper is back where she started.
Pay the high prices for quality goods because they include arbitrary duties that bear no relation to anything, being part of a bankrupt trading philosophy which had its day decades ago; or enter the netherworld of “borrowing” someone from abroad with an airline ticket and passport, or doing other things technically illegal but more observed in the breach.
No new thinking was ever allowed to shine its light into that peculiar retail dungeon we call duty-free shopping in this country.
Of course, judging by the glossy ads in the top tourist publications, you might think that this was a world where everyone lived happily ever after, but in reality, it represents economic thinking that is outmoded by modern purchase methods approved by the same Government which maintains it.
It is a system that discriminates against both the customers who cannot benefit from it due only to place of origin, and many of the smaller enterprises trying to play by the rules of a game which requires lots of upfront capital to finance, and clerical effort to apply for the “drawbacks” of the duties paid.
I have heard it encourages a thriving black market in the form of suitcases coming in full of the items that would legitimately attract such duties but somehow don’t.
I have also heard that locals are the ones who purchase most of the clothing items duty-free, using one of the many subterfuges available, and in fact many duty-free stores rely on these sales to make budget, thus setting the stage for even more intriguing ways to avoid paying this hated and unfair tax.
So the very special duty-free day awarded to a grateful population by the increasingly frazzled Democratic Labour Party (DLP) administration basically allowed people to do what many of them do anyway, but without having to use the system’s back doors. For despite the fact that the system is designed to be subverted, it still takes some, shall we say, “networking”.
Can you see the irony in a system overtly designed only for tourists which cannot survive unless “subverted” by the locals?
I’m told that in order to compete on that single duty-free day, many stores in The City which are not registered for duty free shopping, often because they can’t afford the overdraft facility needed to finance the pay-first system, had to offer discounts, which came out of their own pockets. And we talk about a level playing field for business?
Of course, you won’t see any tears shed for them when victory laps for this great initiative are taken.
As we head into the final week of Christmas shopping, retailers are still hoping for the level of sales they need to make the best of one of the hardest years to hit the economy as a whole and retail in particular. Maybe with the official start of the winter season now behind us, there will be enough tourists shopping duty-free to make them happy.
They are not being helped by the Government as long as it resorts to this “duty-free day” gimmickry, dipping one’s toes in the retail equivalent of surf instead of going for a swim.
The Government could earn points for innovation by suddenly declaring an end to the duty-free discrimination it has practised for years. While there might be a temporary loss to the Treasury with the rush to the stores by locals, the longer term, and sustainable, effect would be to turn Barbados into a shopping mecca for the rest of the region, which would do more to boost tourism from neighbouring countries – already our third largest provider of traffic – than any great campaign the Barbados Tourism Authority (BTA) could devise.
As it stands, the greatest beneficiary of our maintaining this rickety system of unconscionably high duties on clothing and also on many categories of food and beverage is Trinidad and Tobago.
Making Barbados the place for “duty-free shopping for all” would be great for locals, tourists, the airlines, the hotels and the economy as a whole.
If we are prepared to spend $4 million to attract Rihanna’s LOUD concert because of the tourism bounce it gave us for a few days, why not do this? It removes discrimination on the “high street” among both retailers and consumers, it boosts the economy, and it will save lots of foreign exchange spent, not on the items themselves, but on airfares, hotel rooms, taxis or rental cars, food, drink and entertainment by Bajans travelling abroad to shop.
On top of that, it would make us all look a whole lot more fashionable (except for the boring people among us who only like to wear Old Navy jeans and Ralph Lauren shirts).
 
Pat Hoyos is a publisher and business writer
 
 

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