Instead of 10%, on July first you could end up paying a total of 19% in taxes at the store. That is what the Chamber of Commerce and Industry says will happen if government doesn't give business owners credit for goods they already have in stock. It is a fine technical but one with huge implications as double taxation could very easily send prices on certain items skyrocketing. Importers want credit for the current stock, which they have already paid the 9% sales tax on because on July 1st they will also have to charge you the 10% GST on those same goods. If you do the math that'll be 9% percent sales tax plus the 10% GST.
As a palliative measure, yesterday the Ministry of Finance announced that government has suspended sales tax on imports between now and June 30th. Well the Chamber of Commerce met this morning with importers where all agreed that government's offer, however well intentioned, just isn't good enough. The Chamber's Vice-President for Industry Israel "Pie" Marin explained their position.
"We decided that the recommendation to government will be that we are willing for an audit on all business houses to come and check the inventory level that we have and we are requesting that we get a tax credit for all the sales tax that we have paid to government so that this GST or the sales tax is not passed on to consumers come July 1st. we think that if this is not done, prices are definitely going to be increasing by ten percent because there is no way that people can absorb that ten percent and not pass it on. And the two weeks window of opportunity that is being offered by government is definitely a little bit too late. There is no way we can import any substantial amount of inventory now to be able to achieve any be4nefit of that relief.
When VAT was introduced it was a 30 day implementation and it was announced much longer than...for example now we just got the news as a press release on Monday which definitely does not help us to achieve ant advantage of not paying sales tax for the two week period."
The Chamber has submitted the proposal to government. No word on when or if government will reply.
