Dear Editor,

Last week, I received overwhelming support from readers for my letter to the editor titled ‘Don’t blame online shopping for what local retail created’. Several Jamaicans agreed with me that many local retailers apply exorbitant markups on their products, which discourage them for supporting small and medium-sized enterprises (SME).

My cousin, who is the mother of a baby girl, sent me this message via
WhatsApp: “Tav has sensitive skin; she uses Cetaphil. One bar out here is almost $2,000 — some places more than that. I can get six bars on
Amazon for US$18. Where does the Government think I’m gonna buy it?? All if me pay shipping and to clear it, it naa cost me so much.”

Another issue that was raised — including from a Trinidadian — is that the absence of certain in-demand items on local shelves prompt Caribbean nationals to shop online.

In closing the 2026/2027 Budget Debate in Parliament, Finance Minister Fayval Williams has assured the public that the proposed digital-services tax will not affect online shopping. But whether that reassurance is technically correct or not, the reality on the ground is very different. What Jamaicans will do is not stop ordering online, they will simply change how they order.

That change will be simple: Split orders into smaller packages to avoid customs duties.

The Government itself already acknowledges the scale of online shopping. The tax on digital services is expected to raise hundreds of millions in revenue precisely because Jamaicans are consuming more products and services online every year.

But when policy ignores consumer behaviour, consumers respond creatively. And, in Jamaica, the US$100 duty threshold has already shaped behaviour for years.

The cost difference is too big to ignore. When an online purchase goes over US$100, the additional charges are not small — they can double the price once duties, taxes, shipping, and handling are added. This is not speculation; it is exactly how Jamaica’s import system works. Physical goods are assessed, and duties and taxes are applied when they pass through the port of entry, unlike digital services. That means a single US$120 purchase can easily cost more than two separate US$60 purchases.

A rational consumer does the maths. If splitting the order saves money, the order will be split.

One does not have to imagine what Jamaicans will do; it suffices to examine what they are already doing. On online forums and social media platforms, people openly discuss how they manage orders to stay below the US$100 threshold. Users even advise others to make multiple small-value orders (under US$100) to avoid paying duty.

That is not tax evasion; it is consumer adaptation. When policy creates a financial cliff at a specific price point, consumers naturally avoid crossing it.

A 2020 regional policy paper on electronic commerce in Caribbean Community (Caricom) countries warned that taxing digital trade is complicated because online commerce is fluid and difficult to police. Governments may introduce new taxes, but consumers and platforms quickly adjust behaviour in response.

In Jamaica’s case, that adjustment is straightforward: Instead of one US$150 order, customers will resort to two US$75 orders. Instead of one large package, they will order multiple small packages. Instead of buying everything at once, they buy items gradually.

The policy may increase revenue on paper, but consumer behaviour will reduce what the Government actually collects. It’s not about avoiding taxes; it’s about affordability. The truth is that many Jamaicans are not ordering online out of luxury, they are ordering online because local prices are often significantly higher. The digital-tax debate itself has already acknowledged the pressure that online shopping has placed on local retailers and the shift in consumer habits. When incomes are already stretched, consumers will not voluntarily choose the more expensive option, they will choose the smarter one.

The issue is not whether the digital-services tax affects online shopping directly. The real issue is that policy is being made without understanding behaviour. If a policy creates a sharp price jump at US$100 and higher taxes on digital consumption, consumers will simply buy less at one time, split purchases, and shop more strategically. In other words, the system will not stop online shopping, it will make it more fragmented.

The minister may be right that the digital tax does not technically target online shopping. But economics is not about technical definitions, it is about incentives. And the incentive is clear: If Jamaicans can save money by splitting their orders, they will. The question is not whether consumers will adapt, the question is whether policy will adapt to consumers.

Oneil Madden

maddenoniel@yahoo.com