Tuesday, January 10, 2012

How nations shoot themselves in the foot

Raspberry Pi is a very small (credit-card sized) very inexpensive (<$50) computer capable of running Linux. The organization that is building it is located in the U.K. They write:

[T]he Raspberry Pi Foundation had intended to get all its manufacture done in the UK; after all, we’re a UK charity, we want to help bootstrap the UK electronics industry, and doing our manufacturing in the UK seemed another way to help reach our goals.

We investigated a number of possible UK manufacturers, but encountered a few problems...

[O]ne cost in particular ... really created problems for us in Britain. Simply put, if we build the Raspberry Pi in Britain, we have to pay a lot more tax. If a British company imports components, it has to pay tax on those (and most components are not made in the UK). If, however, a completed device is made abroad and imported into the UK – with all of those components soldered onto it – it does not attract any import duty at all.

Res ipsa loquitur.


Miles said...

Are you saying there shouldn't have been the tax in the first place or they should have an import duty put on there though?

Ron said...

I didn't quite parse that, but I'm just pointing out that putting an import duty on parts but not finished products is a strong disincentive to domestic production.

Miles said...

Right, I originally read it as the taxing occurring on the manufacture, I missed the bit about the components. That is bizarre.