The Foreigner Tax, And Some Ways to Avoid Paying it
Lots of people shout to the far corners of the social media-sphere, touting the money they’ve saved moving to another country. From rent to surgeries! From food to date nights! Lowering costs by living in anther country is the click bait, the headlines, that many find irresistible! What they don’t talk about are the times they’ve/we’ve been had. Our wallets and bank accounts nipped around the edges by what I call, the “foreigner tax.”
What it the Foreigner’s tax?
Roughly, it’s what people who move to other countries pay because they don’t know what the locals know.
Here’s some examples:
A few decades ago it was rumored that many restaurants in Costa Rica did not print prices on their menus so they could charge foreigners one price and locals another.
A doctor in the Philippines says, loud enough for me to hear, “Charge them (this much) so someone who needs only has to pay (this much).”
A taxi ride from the airport to their hotel in Cebu cost a very angry couple, I overheard complaining, 2700 Philippine pesos (about $50) instead of around 260 (about $5), the usual fare.
A barber (Philippines) charged me for a shave even though he cut my beard with clippers. He figured I wouldn’t know or wouldn’t complain. Because of the kindness of a stranger, he was wrong on the first count. Because I am the me that I am, he was wrong on the second count also.
How you know you’re paying a “foreigner tax”
Now there’s a difference between paying a “foreigner tax” and what’s just a price difference. After all the world is not McDonalds. Sometimes it’s just a matter of the same goods, services and consumables being priced differently in different places. I once paid an electrician (Philippines) the equivalent of $90 to fix three lights. I then found out from another electrician he would have only charged $30. Was this me paying a foreigner tax or simply a case of one person charging less than his competitor?
The difference is intent. Was the first electrician charging me three times the other’s price because I’m a foreigner? If that’s the reason his price was inflated then yes, I paid a “foreigner tax.” His assumption, which was correct, was that I didn’t know what I should’ve been charged. What I would be charged if I was a local. And he was right.
Now let’s be clear. This is not an “us” vs them” phenomenon. It happens to foreign nationals who come to the U.S. also. It seems charging people who don’t know how much things cost, or should cost, is just in people’s DNA. Just how many see doing business. Perhaps sad commentary about humanity.
Here’s some things I’ve learned in my journeys. Maybe a few of them will save you some money.
I never talk or text while going from one place to another. I don’t let myself get distracted from knowing where I am with respect to where I’m going and what it will cost to get me there. It’s a matter of my security also.
If I’m going someplace I don’t know, I’ll Google the distance and route before getting into a taxi. I’ve been driven in circles before. And it ain’t fun. I’ll ask Concierge, airport security, car rental agents (even if I’m not renting) or attendants the approximate cost to get me where I’m going. And what’s the best way to get there.
I use forums and groups to understand how much I might pay for goods and services before going to buy them.
In building our house (Philippines) I budgeted an additional 10% on top of the 10% cost overrun I’d already factored into project costs to account for the “foreigner tax” vendors might charge me. I also asked the contractor for original receipts or I paid for them myself so I minimized him charging me more.
I pay for lots of stuff by credit card. Like when, I put our wedding reception deposit on my card. Good thing I did! My card company got me my money back when the venue changed their menu, but not their prices.
I sometimes send a local, my brother in-law, to price things for me. I don’t go with him. That would defeat the strategy. When he’s given a lower price or been able to haggle for a lower price he makes the purchase.
Truthfully,
I’ve found no way to avoid paying the “foreigner tax.” If you live or travel in another country, it’s going to happen. What I’ve come to is this: the most one can hope for is a little luck and lots of good will. Though nothing beats being vigilant and assertive! Doing one’s homework to know as much as possible before handing over your money is the best strategy.
About thirty years ago a colleague said, having the courage of incompetence was a good skill to have. When I’m in a place I don’t know that’s my default position: I am not afraid to ask stupid questions. They may never see me again anyway. I also try not to make myself vulnerable. When shopping, I tend to wear nothing that tells a vendor more than they need to know. They already think I’m rich. Why convince them?
Though I love traveling alone, I seldom shop by myself. In fact, I prefer shopping with someone who knows the local language. At least not until I know the place and the people there. And, I’m also always ready to walk away. Even if I’m wrong. In many countries cash is king. And when the king is not benevolent, the taxes can be high.
