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Jamaica keen to track online trade

Tax Administration Jamaica and Bank of Jamaica, BOJ, which regulate various aspects of commerce, want to know more about your online Christmas shopping.

It forms part of a wider effort to get more data on digital trade in and outside the island. Currently, they can see generic information—that you bought something on a popular site, but they want to know if it was socks, shorts, or sneakers. The authorities also want to know the quantum of online sales happening within Jamaica as opposed to international online sites.

But getting the data is likely to be a hard slog, as the international community has already attested in regard to unique data.

“At this stage, the share of cross-border expenditures is approximated, as an exact distinction is not possible,” noted the recently published second edition of the Handbook of Measuring Digital Trade, a joint publication of the World Trade Organization, the Organisation for Economic Co-operation and Development, and the United Nations.

To get that information, it requires additional data from international credit card gateways such as VISA, Mastercard, American Express, and the Japan Credit Bureau, which at least some of them have agreed in principle to share, according to the report.

The Jamaican authorities also want to synthesise data from existing surveys and other sources to generate a local estimate.

“In the future, Jamaica plans to use data from payment gateway companies to better disaggregate the credit card data in terms of goods and services,” stated the WTO/OECD/UN handbook, which contained a case study and outlook on Jamaica. That section was written by Esmond McLean of the BOJ and Tax Administration staff Hank Williams and Diedre Campbell.

It explained that a payment gateway is a form of technology used by merchants to accept debit or credit card purchases from customers. The term includes not only the physical card-reading devices found in brick-and-mortar retail stores, but also the payment processing portals found in online stores.

Currently, credit card companies provide monthly data on expenditures by Jamaican residents cleared through foreign websites. The card companies break down the purchases into “four-digit numbers that classify the type of goods or services”.

The available level of detail does not allow a “precise identification of products”, the report noted. Additionally, the data does not easily distinguish between an item bought by a “resident and non-resident”, because the credit card information only indicates the country of residence of the bank issuing the card, rather than the residency of the card user.

Digital trade forms a large and growing subset of international trade transactions. That’s because businesses and consumers often conduct transactions online via laptops or smartphones.

The definition of digital trade has implications for balance of payments accounting. OECD refers to digital trade as “the international sale or purchase of a good or service conducted over computer networks by methods specifically designed for the purpose of receiving or placing orders”.

Jamaica’s overall trade with other countries runs to billions of dollars. The value of imports between January and August 2023 was estimated at US$5.04 billion by the Statistical Institute of Jamaica, and exports at US$1.4 billion.

No estimate regarding the size of digital trade in Jamaica was included in the handbook. As to whether Tax Administration and BOJ have a working idea of what the figure might potentially be, that’s unknown, as neither entity responded to requests for comment sent nearly a month ago.

In 2022, businesses in OECD countries, which are 38 of the world’s largest economies, recorded 30 per cent of orders over computer networks, and 20 per cent for individuals, the report stated.

Back in 2021, Tax Administration Jamaica coordinated a “stocktaking exercise” aimed at identifying a range of possible data sources relevant for estimating digital trade in Jamaica, involving official information as well as experimental data, the report stated. The staff realised that rather than developing new “costly” surveys, they could use existing data sets and surveys to derive estimates.

The survey sources that would be utilised for stitching together digital trade information include the Survey of Living Conditions, Tourism Expenditure Survey and Tourism Satisfaction Survey. Additionally, Tax Administration identified credit card data reports, TAJ tax forms, and Jamaican Customs forms as potential data sources. Some of these surveys have limitations, the report explained, but would still assist in providing a proxy estimate.

“It is important to note that the approaches described in this case study have not yet been implemented,” the WTO/OECD/UN report noted. “The intention is to derive policy-relevant measures of digital trade without creating excessive burdens either for the statistical compilers or for the survey respondents,” it said, the idea being to draw on information provided by the key stakeholders in the statistical system.

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