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.

3 comments:

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.