Sweeping changes to how the Cayman Islands will levy tariffs on imported goods are now being considered by Legislative Assembly members.
Cost of champagne? |
The changes are part of a rewritten Customs Tariff Bill (2007) which is expected to be debated in the house soon.
The existing Customs Tariff Law (2002 Revision) lists the tariffs or duty an importer must pay before taking possession of goods that are shipped to the island. The list is a little over nine pages long and contains 22 separate sections for items like live animals, vegetable products, textiles, footwear, food, wood products, cars, aircraft…almost anything that someone would want to ship in.
The newly proposed list also contains 22 similar sections, but it is more than 200 pages long and is broken into far more detailed descriptions of imported items.
For instance, in the current Tariff Law there is one listing under the category of ‘prepared foodstuffs’ for cereal, which includes breakfast cereal.
The new bill contains listings for eight different types of cereals including; wheat, rye, barley, oats, corn, grain sorghum, rice and buckwheat. No duty is charged on the importation of any category of cereal.
In a general explanation for why the Tariff Law changes were needed, the government states the current classification system was simply not detailed enough to provide useful information.
‘It is currently not known…what is the volume and value of specific items that are imported and exported to and from the islands,’ states the Customs Tariff Bill (2007) Memorandum of Objects and Reasons. ‘No policy decision can therefore be taken by the government on the quantity of a specific item to be imported.
‘In addition, the government is unable to calculate how much revenue will be raised or lost if a policy decision is taken to increase or decrease Customs duties in specific areas.’
The proposed Tariff Law does not call for a general increase or decrease in import duties. However, there are specific items on which duties have been added or increased.
As an example, in the Customs Tariff Law (2002 Revision), the importation of live turtles to Cayman is duty free. In the newly rewritten law importers would have to pay a duty of 50 per cent.
The proliferation of categories in the newly proposed Tariff Law may also add some fees where none had existed before.
Butter and margarine, under the current law are duty free. The new law keeps butter and margarine duty free, but a new category of ‘dairy spreads’ would cost a 20 per cent import duty. The law does not clearly define dairy spreads.
Charges for the importation of beers, wines, and liquor have stayed about the same. However, import duty on champagne has gone from 25 percent of its c.i.f. value to $10.50 per litre. Presumably this would increase the import charges on cheaper brands, but could end up actually lowering import duty for higher end champagnes.
The new Tariff Bill uses an international product listing system referred to as the Harmonized Commodity Description and Coding system to create product categories. The harmonized system is generally used in determining international trade statistics.
Customs and government officials hope using that system will help facilitate international trade.
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