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Global Business, Trade Sanctions, and Taxation Affect Everyone

global trade mintJust when doing business on a global scale seemed to be getting more manageable there is an increasing number of signs that indicate gamesmanship is going to trump openness... sooner than later. If there was ever reason to understand the status of your supply chain, the time looks to be now. Here are some of the signals I'm watching.

</>Our own Tami Kamin Meyer wrote her introductory article "Taxes and Legislation in South Africa and Mexico on E-Invoicing" in which she identified new tax regulations taking effect in January of this year in the MINT countries (Mexico, Indonesia, Nigeria, and Turkey) as well as South Africa. These particular taxes are aimed specifically at electronic services including e-invoicing and seem to extend to XML. These moves seem to be a pretty transparent ploy to extract revenue from the transactions that make business happen in addition the existing VAT and import taxes that may or may not be in effect on specific products. Look for additional coverage from Tami on an upcoming move by Chile. The country has apparently mandated the use of e-invoicing. I can't imagine that this is not a precursor to the imposition of some kind of regulation that is likely to include taxes.

In an additional point, Dan Gilmore at SupplyChainDigest posted his thoughts on the effects of Russia's take over of Crimea in which he postulates changes in the geo-political climate that are likely to put a pall over what we thought was a growing global trade. In fact, he points out that, "Last year, global trade is believed to have grown just 2.5% - lower than global GDP growth. Think about that - it is quite astounding, in this global era. Leading up to the 2008-09 recession, global trade growth was routinely two times the rate of global GDP growth. We are seeing a significant slowdown in cross border trade, and far from all of it caused by the never ending slump in Europe."  I'm surprised at this low number and expected it would have been a much larger increase.

Now that the control points are in place to monitor the movement of goods by tracking their electronic trails rather than their physical presences, it's easier than ever to know what is being traded with whom. There's little alternative to using the digital facilities anymore, and the advantages outweigh the problems created by would-be intrusive regulations. The best part of this increase in governmental awareness is that mandating the use of EDI/digital supply chain transactions is being done by regulatory bodies with the authority needed to make this happen, rather than by individual trading partners. The cost of business may increase because of these new taxes, but the advantages gained by efficient and visible supply chains are likely to outweigh the negative aspects.
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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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