A lot of people in here are saying - oh I had to do this is Germany or Denmark or USA as well. Which is fair, but what irks me is that in India which has pretty high taxation in all departments (see Petrol/Gasoline) the tax you pay gives you ZERO benefit. No healthcare, education or unemployment benefits etc. Also on top of this, due to the corrupt system, if you need anything from any govt. agency you will need to pay a bribe anyways (e.g. registering an apartment, even getting a passport).
TBH, I am a big fan of taxes, I am happy to pay even 50-60% in taxes if that means my fellow human is not left hungry or without healthcare or without a roof on their head. In India this is not the case, high taxes, with no benefits to anyone (except the government and their friends).
I think what you're missing is that a vanishingly small proportion of the population actually earns enough to pay income tax and there's a breathtakingly huge number of relatively poor folks. A lot of services are massively subsidised for these folks but there's a billion of them.
The whole Indian railways network is massively subsidized but it's doubtful anyone on HN would travel by anything other than air conditioned if indeed they travel by train (eg. I've never travelled by train after i began working).
In many states, basic groceries are effectively free. The less well off folks buy from these, the "middle class" shops from private traders. However there's a massive number of the less well off.
Not saying there's no corruption, but the scale of the problem is massive.
I think perhaps you are conflating no services for the upper 20% of society with no services. But the gulf is very wide in India and the population is massive. 354 million people in poverty!
India's food assistance programs, free education, and healthcare are amongst the most used on the planet.
Examples from Wikipedia:
- The Indian public health sector encompasses 18% of total outpatient care and 44% of total inpatient care
- Free lunch programs for underprivileged children: "Serving 120,000,000 children in over 1,265,000 schools and Education Guarantee Scheme centres, it is the largest of its kind in the world"
- Universal healthcare targeted at underprivileged: "PMJAY and the e-card provide a coverage of Rs. 5 lakh ($ 6860) per family, per year, thus helping the economically disadvantaged obtain easy access to healthcare services."
- 550,000 ration shops providing subsidized food
Please do not generalize your own experience to that of 1 billion people.
Are taxes really that high compared to other countries? India has a tax to gdp ratio of 10%, compared to 25% in the US and 40% in the EU. Maybe you are underestimating just how much taxes are required to fund an effective welfare state?
in the US paying 60% in taxes is equivalent to 'not contributing your fair share" which is why Biden wants to take it even higher. I'm surprised how US has some of the highest income taxes (especially in places like CA and NYC) but people still think it's a low tax place.
> It is no secret that the taxes and duties that are applied to imported phones are highest in India. The taxes are so high that for an important iPhone that you will end up paying an average tax of Rs 24,000 for something like an iPhone 12 or iPhone 12 Mini.
> However, despite the sky-rocketing prices, iPhone still sells best in India and the buyers give whatever price Apple asks them to pay. So for a business, that is not a bad deal at all.
Not really a good deal for Apple. More like an amazing deal for the Indian government.
I doubt that the taxes from import of electronics is significant enough for it to be a 'great deal' for the Indian Government. I think their intended purpose is to promote/protect local manufacturing.
A $149 IntelliJ licence costs $176 including taxes + there is a 3.5% processing and currency conversion charges imposed by by credit card. Converting to INR I may have to shell out Rs. 3.5k to 4k extra which has dissuaded me going for an All Products Pack and settle for the Ultimate license.
I came to say this, but since you already said, another information:
Some years ago a lawmaker calculated the taxes for game consoles and concluded they are 273% of the US price.
Also when Sony was heavily bashed for the price of Playstation 4 at launch, people claiming they were price gouging, Sony blamed taxes, so I went and calculated the taxes myself, as if my store would sell it (I own a store but sell other stuff). End result was that Sony wasn't lying, 71% of the final price was taxes.
Prices of electronics are insane in Brazil. I'm Polish, so we don't have as cheap electronics as US does, but still. I tried to find a laptop for my Brazilian friend and the prices were often double the prices of here too. Not only that, but they were the older models, e.g. a laptop here with SSD and GTX 1650 would have HDD and GTX 1050 there for twice the price.
Many stores in Orlando, Florida cater to just these middle-upper class Brazilians who takes these trips. In fact, it is not uncommon to speak/respond/switch between English/Spanish/Portguese in shopping malls.
I understand taxing an optional luxury item like iPhone to encourage local manufacturing, with all the cheap phones available it won't affect the common man too much. But the government here is bent on taxing everything as much as possible. Eg: The Prime Minister keeps harping about "Digital India" but computer components and laptops have an import duty of 80-100%. Does he have the money to build a fab in India ? Hell no, but tax processors at 80%. Talks about "Artiphisial Intelligence" in his speech and annual budget, but taxes GPUs at 80-100%.
The rich and middle class have workarounds for these duties by asking friends and family to bring them things from US, but its the poor who's children suffer the most. Poverty is not a problem in India, its a design feature, keep people poor and stupid, loot them all you want.
Most people who have the resources or skill to leave India are doing it anyway. Policies like these will only serve to expedite it. This country will likely be next Venezuela.
PS: This is not a political statement against the present government, every political party here has done and will continue with this stupidity.
I had a friend who was unemployed and really going through a shitty spell. Then the news that you could go to Miami buy a PS4 and resell here came up. He started doing this all the time, and then going to the parks and whatnot. Eventually he started living there and working in tourism. Finally, he arranged to bring the capital to open a tourism agency in Miami and stay there for good.
Last time there was a hurricane I texted him and he said "yeah, we boarded up the house; I'm living at a Disney hotel for the time being".
On a much smaller scale, this is achieved in the US by going to a no sales tax state like Oregon or Delaware.
With the sales tax in Los Angeles at 10.25%, I’ve ended up queuing up large purchases together, buying a round trip ticket to Portland ($200-300) and hitting up the Apple Store, Target, Best Buy there. And get a free trip to Portland!
I’ve read the Christiana Mall in Delaware is especially popular for people living along the I-95 corridor for this very purpose.
In Argentina, pre pandemic there were people that actually went shopping to Miami, because getting anything Apple - be it an iPhone or a laptop - was cheaper that way.
The iPhone 12 is not for sale here, but let's use the iPhone 11 as an example. In the only "official" store I could find it [0], the price is 184.299 pesos (yes, 184 thousand). If you check the "official" US dolar rate [1] it is around 80 pesos.
But hear me out: The country has so little reserves, that officially buying dollars is limited to 200 dollars per person per month. If you buy something using your credit card outside of the country - be it online or in person - this limit does not apply, but in both cases you have "extra" taxes to pay (Buying or spending dollars is called "dolar turista"). the final rate for this is around 137 pesos (again, [1])
Let's use 140 as the CC rate, for rounding. Considering the same iPhone 11 is around 630 dollars in Amazon, the price in "dolar turista" is 88.060 pesos.
that still leave us around one hundred thousand pesos left to the current street price of the phone. considering I can currently get tickets to Los Angeles [2] for around 60K pesos, that more or less gives me ample room for having a short US holiday when getting the phone (Supposing I can get the VISA to enter the country ;) ).
BTW the reason for this phone to be so expensive is that there's a black market rate for the US dollar (Called the "blue" dollar) and it's rate is currently around 180 pesos. Using this rate, plus the normal taxes and stuff when importing things, we get close to the street price.
I have often heard the anecdote of Argentinians flying to North America for shopping. But why is Chile not used for these purposes? Chile doesn’t have the import-substitution policies of Argentina, and in my visits to Chile I didn't feel that the country was not significantly more expensive than the USA.
South American countries bend over backwards in order to not tax income, so consumption gets taxed to ridiculous levels and these absurd situations arise.
And a foreign reserves crisis doesn't help either.
Does this tax work actually work? Surely the amount of people who actually pay the tax is near 0 and they'd get far more tax revenue from a lower tax rate right? I'd actually bet that this tax in particular not only doesn't raise money, but is a net-negative tax-wise as you're forcing people to spend their incomes on flights/hotels out of the country they otherwise wouldn't and they probably buy other things on their trip too.
From living in Chicago these forms of taxes seem so counter-productive. The pattern seems to be that a budget needs to be balanced, so they come up with a new consumption tax that conveniently assumes that the level of consumption stays the same with the new tax in place, but it never ever does.
It's so frustrating because once a tax gets extreme enough that almost no one pays it, lowering/removing it would benefit everyone including the government. It's one of those rare things that can be fixed instantly at no effort/cost with only positive results, yet it won't get done.
This is not a tax issue, but induced by existence of dual exchange rates. I'm guessing due to the limits, most phone resellers have to obtain their US dollars from the black market at higher rates, resulting in higher local pricing. Only those who are well-connected or buy dollars in low volumes can get adequate sums at the official rate, and even then, the arbitrage opportunity may be too good to miss out on, which results in prices close to black market rates, regardless.
The article excludes the cost of import duty, and other taxes (see daedalus's comment). It is a false argument to say that if I didn't pay tax things could be cheaper eg. if I break the law I can get a cheaper iPhone.
Getting caught for breaking the law is a stochastic system, but the expected value is lower than most people think.
Edit: How far are people willing to take this? Should we share an article saying someone got a free iPhone by buying a machine gun and stealing a truck full of iPhones? Where is the efficient frontier of breaking the law vs cheaper goods?
I wish the article went into the cause of the price difference. Is it high import taxes/sales taxes/etc., restrictions that make the phone harder to produce or sell for the Indian market, or just Apple deciding to charge a sizably higher markup in India than elsewhere?
In Pakistan, to prevent this, you either can only buy a cellphone whose IMEI was registered with our regulatory authority (when it was imported via official means), or you can register a personally imported phone with absurdly excessive taxes, which makes the whole point moot.
(btw you can only buy a SIM that's linked to our national identity card, so the sim will just not work. There is a six months grace period for foreign visitors)
This means that device options are very limited and prices are absurd. You can buy a small car for the price of an iPhone, for example. We easily pay atleast 20%-50% premium on the same device from india, despite having similar economics.
Similarly but without COVID-suppressed airline prices, I remember back before Creative Cloud reading that it was cheaper to fly from Australia to the US to buy Creative Suite
Decent article explaining the prices, and also the influences of taxes and import duties. But the author kinda makes it sound like it’s Apples fault for their price ing in India.
Really the government’s fault for imposing such high duties and taxes. I just don’t understand it from a morality perspective .
Semi-related story: I flew to Uzbekistan through Dubai last year for vacation. Waiting for my backpack, I saw something that blew my mind: locals who arrived with me taking all kinds of TVs, ovens etc. from the conveyor belts.
It never occurred to me that you can fly somewhere, buy big stuff and have them checked in as your baggage. It's not something I ever saw in Europe's airports.
(Not sure if reason was more the price, or lack of availability of goods; probably a mix of the two.)
Since the article lists prices in INR: The price of the iPhone 12 Pro in India in USD today is $1,615.22, and the price in Dubai is $1,140.15. So it must be possible to fly round-trip to Dubai for less than about $475, which seems plausible.
There are actually quite a few regularly scheduled flights to Dubai from India that can be acquired cheaply - a not-insignificant amount of the area’s migrant workers originate from India.
The calculation is not as simple as that. Any imports above INR 50K (about USD 676), while traveling back to India by Indian citizens, attract import duties (of 35% or so, IIRC). So the $1140.15 device, when it lands in India, would attract a duty on the excess amount. Of course, people may not declare it at customs or may try to claim it's a used device (while not having any other phone), but this is the official law.
This goes for many products and services, because of different tax and import rates.
From Europe it is often still cheaper to fly to a different country to buy clothes, electronics, etc. Problem is that you still have to pay the import tax once you cross the border back into your own country.
Hence why many airline crew ran (run?) side hustles of buying and selling luxury goods, since they were (are?) rarely checked at the border of their home country.
Can't you just buy some electronics, throw away all receipts and such and simply claim to customs that you had it already for a while?
For example, when I bought my Audio Technica ATH-M50X in the US for about $100 (while in my country they were about twice as expensive) I just had it around my neck as I was listening music through it. No one asked a thing.
In all fairness, I went to the US for fun and got a chance to use them at a demo and was immediately sold.
This one hits me close to home, it was the same way back then in Turkey.
To describe how bad it is: Recently a popular politican tweeted Playstation 5 costs 8299₺ in Turkey, which is more expensive than booking a flight to Bulgaria, having a modest stay and buying Playstation there. This is a country where minimum wage is 2300₺ ($290) and around half the country is being paid that amount. iPhone 12 Pro? Base model rumored to be $1900.
Oh, and cars cost around 4 times more expensive, so a second hand 2007 Ford Fiesta costs around 15 times the minimum wage.
But hey, voters were happy and they've been happily voting for the same guy for 20 years. There must be some 'folk wisdom' there but I certainly missed what it is.
This sort of thing is quite common in a lot of places.
Years ago I remember that I wanted to buy one of those Rock Band sets for Playstation that came with the whole band. But they were so expensive back in Brazil, that I did the math and it was the same price to fly to Miami, book a hotel for the weekend, buy the set, and come back.
[+] [-] rockyj|5 years ago|reply
TBH, I am a big fan of taxes, I am happy to pay even 50-60% in taxes if that means my fellow human is not left hungry or without healthcare or without a roof on their head. In India this is not the case, high taxes, with no benefits to anyone (except the government and their friends).
[+] [-] sfifs|5 years ago|reply
The whole Indian railways network is massively subsidized but it's doubtful anyone on HN would travel by anything other than air conditioned if indeed they travel by train (eg. I've never travelled by train after i began working).
In many states, basic groceries are effectively free. The less well off folks buy from these, the "middle class" shops from private traders. However there's a massive number of the less well off.
Not saying there's no corruption, but the scale of the problem is massive.
[+] [-] nikhizzle|5 years ago|reply
India's food assistance programs, free education, and healthcare are amongst the most used on the planet.
Examples from Wikipedia:
- The Indian public health sector encompasses 18% of total outpatient care and 44% of total inpatient care
- Free lunch programs for underprivileged children: "Serving 120,000,000 children in over 1,265,000 schools and Education Guarantee Scheme centres, it is the largest of its kind in the world"
- Universal healthcare targeted at underprivileged: "PMJAY and the e-card provide a coverage of Rs. 5 lakh ($ 6860) per family, per year, thus helping the economically disadvantaged obtain easy access to healthcare services."
- 550,000 ration shops providing subsidized food
Please do not generalize your own experience to that of 1 billion people.
https://en.wikipedia.org/wiki/Public_distribution_system
https://en.wikipedia.org/wiki/Social_Programs_in_India
https://www.commonwealthfund.org/international-health-policy...
[+] [-] instagraham|5 years ago|reply
India has a massive welfare state. Just because it doesn't benefit iPhone 12 buyers doesn't mean it doesn't exist.
Is the welfare state 100% effective? No. But it's disingenuous to say welfare doesn't play a role for millions of families.
[+] [-] robotresearcher|5 years ago|reply
https://en.m.wikipedia.org/wiki/Education_in_India
Is this not working out in practice, in your view?
[+] [-] Joeri|5 years ago|reply
[+] [-] vinni2|5 years ago|reply
[+] [-] throwawy42434|5 years ago|reply
[deleted]
[+] [-] jsu32|5 years ago|reply
in the US paying 60% in taxes is equivalent to 'not contributing your fair share" which is why Biden wants to take it even higher. I'm surprised how US has some of the highest income taxes (especially in places like CA and NYC) but people still think it's a low tax place.
[+] [-] robertlagrant|5 years ago|reply
> However, despite the sky-rocketing prices, iPhone still sells best in India and the buyers give whatever price Apple asks them to pay. So for a business, that is not a bad deal at all.
Not really a good deal for Apple. More like an amazing deal for the Indian government.
[+] [-] reaperducer|5 years ago|reply
By comparison, I paid $92.04 in sales tax for my new iPhone, and I am currently in a geography that is considered low-tax.
[+] [-] hannofcart|5 years ago|reply
[+] [-] krisgenre|5 years ago|reply
A $149 IntelliJ licence costs $176 including taxes + there is a 3.5% processing and currency conversion charges imposed by by credit card. Converting to INR I may have to shell out Rs. 3.5k to 4k extra which has dissuaded me going for an All Products Pack and settle for the Ultimate license.
[+] [-] ampdepolymerase|5 years ago|reply
[+] [-] KingOfCoders|5 years ago|reply
Not despite.
People don't understand the Apple brand.
[+] [-] vdfs|5 years ago|reply
[+] [-] pedro_hab|5 years ago|reply
In the case of the iPhone you might need to find a cheap flight to the US, but a Macbook will land you a couple days in Disney.
[+] [-] speeder|5 years ago|reply
Some years ago a lawmaker calculated the taxes for game consoles and concluded they are 273% of the US price.
Also when Sony was heavily bashed for the price of Playstation 4 at launch, people claiming they were price gouging, Sony blamed taxes, so I went and calculated the taxes myself, as if my store would sell it (I own a store but sell other stuff). End result was that Sony wasn't lying, 71% of the final price was taxes.
[+] [-] skocznymroczny|5 years ago|reply
[+] [-] sysadmindotfail|5 years ago|reply
[+] [-] bryan0|5 years ago|reply
Basically commas only separate 2 digits after the first group of three. TIL
[+] [-] Okkef|5 years ago|reply
[+] [-] teatree|5 years ago|reply
The rich and middle class have workarounds for these duties by asking friends and family to bring them things from US, but its the poor who's children suffer the most. Poverty is not a problem in India, its a design feature, keep people poor and stupid, loot them all you want.
Most people who have the resources or skill to leave India are doing it anyway. Policies like these will only serve to expedite it. This country will likely be next Venezuela.
PS: This is not a political statement against the present government, every political party here has done and will continue with this stupidity.
[+] [-] prionassembly|5 years ago|reply
I had a friend who was unemployed and really going through a shitty spell. Then the news that you could go to Miami buy a PS4 and resell here came up. He started doing this all the time, and then going to the parks and whatnot. Eventually he started living there and working in tourism. Finally, he arranged to bring the capital to open a tourism agency in Miami and stay there for good.
Last time there was a hurricane I texted him and he said "yeah, we boarded up the house; I'm living at a Disney hotel for the time being".
So that's what happens.
[+] [-] acwan93|5 years ago|reply
With the sales tax in Los Angeles at 10.25%, I’ve ended up queuing up large purchases together, buying a round trip ticket to Portland ($200-300) and hitting up the Apple Store, Target, Best Buy there. And get a free trip to Portland!
I’ve read the Christiana Mall in Delaware is especially popular for people living along the I-95 corridor for this very purpose.
[+] [-] ericol|5 years ago|reply
In Argentina, pre pandemic there were people that actually went shopping to Miami, because getting anything Apple - be it an iPhone or a laptop - was cheaper that way.
The iPhone 12 is not for sale here, but let's use the iPhone 11 as an example. In the only "official" store I could find it [0], the price is 184.299 pesos (yes, 184 thousand). If you check the "official" US dolar rate [1] it is around 80 pesos.
But hear me out: The country has so little reserves, that officially buying dollars is limited to 200 dollars per person per month. If you buy something using your credit card outside of the country - be it online or in person - this limit does not apply, but in both cases you have "extra" taxes to pay (Buying or spending dollars is called "dolar turista"). the final rate for this is around 137 pesos (again, [1])
Let's use 140 as the CC rate, for rounding. Considering the same iPhone 11 is around 630 dollars in Amazon, the price in "dolar turista" is 88.060 pesos.
that still leave us around one hundred thousand pesos left to the current street price of the phone. considering I can currently get tickets to Los Angeles [2] for around 60K pesos, that more or less gives me ample room for having a short US holiday when getting the phone (Supposing I can get the VISA to enter the country ;) ).
BTW the reason for this phone to be so expensive is that there's a black market rate for the US dollar (Called the "blue" dollar) and it's rate is currently around 180 pesos. Using this rate, plus the normal taxes and stuff when importing things, we get close to the street price.
[0] https://tienda.personal.com.ar/iphone
[1] https://www.ambito.com/
[2] https://promociones-aereas.com.ar/2020/10/los-angeles-flexib...
[+] [-] Mediterraneo10|5 years ago|reply
[+] [-] forinti|5 years ago|reply
And a foreign reserves crisis doesn't help either.
[+] [-] bigdollopenergy|5 years ago|reply
From living in Chicago these forms of taxes seem so counter-productive. The pattern seems to be that a budget needs to be balanced, so they come up with a new consumption tax that conveniently assumes that the level of consumption stays the same with the new tax in place, but it never ever does.
It's so frustrating because once a tax gets extreme enough that almost no one pays it, lowering/removing it would benefit everyone including the government. It's one of those rare things that can be fixed instantly at no effort/cost with only positive results, yet it won't get done.
[+] [-] sangnoir|5 years ago|reply
[+] [-] nikhizzle|5 years ago|reply
Getting caught for breaking the law is a stochastic system, but the expected value is lower than most people think.
Edit: How far are people willing to take this? Should we share an article saying someone got a free iPhone by buying a machine gun and stealing a truck full of iPhones? Where is the efficient frontier of breaking the law vs cheaper goods?
[+] [-] smeyer|5 years ago|reply
[+] [-] ryzvonusef|5 years ago|reply
https://dirbs.pta.gov.pk/
(btw you can only buy a SIM that's linked to our national identity card, so the sim will just not work. There is a six months grace period for foreign visitors)
This means that device options are very limited and prices are absurd. You can buy a small car for the price of an iPhone, for example. We easily pay atleast 20%-50% premium on the same device from india, despite having similar economics.
[+] [-] ballenf|5 years ago|reply
[+] [-] wlesieutre|5 years ago|reply
[+] [-] deadalus|5 years ago|reply
[+] [-] torgian|5 years ago|reply
Really the government’s fault for imposing such high duties and taxes. I just don’t understand it from a morality perspective .
[+] [-] jakub_g|5 years ago|reply
It never occurred to me that you can fly somewhere, buy big stuff and have them checked in as your baggage. It's not something I ever saw in Europe's airports.
(Not sure if reason was more the price, or lack of availability of goods; probably a mix of the two.)
[+] [-] AnimalMuppet|5 years ago|reply
[+] [-] dry_soup|5 years ago|reply
[+] [-] SOLAR_FIELDS|5 years ago|reply
[+] [-] wtmt|5 years ago|reply
[+] [-] umeshunni|5 years ago|reply
[+] [-] LeonM|5 years ago|reply
From Europe it is often still cheaper to fly to a different country to buy clothes, electronics, etc. Problem is that you still have to pay the import tax once you cross the border back into your own country.
Hence why many airline crew ran (run?) side hustles of buying and selling luxury goods, since they were (are?) rarely checked at the border of their home country.
[+] [-] thechao|5 years ago|reply
[+] [-] cptthrowaway|5 years ago|reply
For example, when I bought my Audio Technica ATH-M50X in the US for about $100 (while in my country they were about twice as expensive) I just had it around my neck as I was listening music through it. No one asked a thing.
In all fairness, I went to the US for fun and got a chance to use them at a demo and was immediately sold.
[+] [-] aranelsurion|5 years ago|reply
To describe how bad it is: Recently a popular politican tweeted Playstation 5 costs 8299₺ in Turkey, which is more expensive than booking a flight to Bulgaria, having a modest stay and buying Playstation there. This is a country where minimum wage is 2300₺ ($290) and around half the country is being paid that amount. iPhone 12 Pro? Base model rumored to be $1900.
Oh, and cars cost around 4 times more expensive, so a second hand 2007 Ford Fiesta costs around 15 times the minimum wage.
But hey, voters were happy and they've been happily voting for the same guy for 20 years. There must be some 'folk wisdom' there but I certainly missed what it is.
[+] [-] victords|5 years ago|reply
Years ago I remember that I wanted to buy one of those Rock Band sets for Playstation that came with the whole band. But they were so expensive back in Brazil, that I did the math and it was the same price to fly to Miami, book a hotel for the weekend, buy the set, and come back.
[+] [-] rado|5 years ago|reply
[+] [-] fomine3|5 years ago|reply