Customs tariff bill delayed

A bill that will bring major changes to the Cayman Islands’ customs tariff system has been delayed in each of the past two meetings of the Legislative Assembly.

The Customs Tariff Bill (2007), which will replace the Customs Tariff Law (2002 Revision) if it’s approved, does not call for a general increase or decrease in import duties. However, it reorganises the islands’ goods classification system adding hundreds of specific products that are not in the law.

Financial Secretary Kenneth Jefferson said last week that some extra time would be needed to educate importers about the ramifications of the bill.

‘Customs is still continuing their discussion with merchants regarding the tariff bill,’ Mr. Jefferson told the Legislative Assembly.

Mr. Jefferson said he hoped the proposal would be approved at the LA’s next meeting which is scheduled to start 15 February.

The existing list of tariffs on imported goods is broken into 22 sections and itemises duty to be paid on everything from live animals, to vegetables, to cars that are brought to Cayman.

The list proposed in the new law contains the same 22 categories but is much more specific, with 200 pages of items, which could potentially be imported.

Although there is no general price hike for imports, there are specific items on which duty has been added or increased.

For example, in the current tariff law the importation of live turtles to Cayman is duty free. Under the new bill, importers would have to pay a duty of 50 per cent.

The proliferation of categories in the tariff bill could end up adding new fees for items that didn’t previously exist.

Butter and margarine, under the new tariff bill would remain duty free, for instance. However, the proposal creates a new category of ‘dairy spreads,’ which would have a 20 per cent import duty attached. Dairy spreads are not defined in the bill.

There are also areas where categories of imports have quadrupled, requiring customs officials and importers to be much more specific.

The new bill lists eight different types of cereals, where the current law only lists breakfast cereal under the heading of ‘prepared foodstuffs.’

The government has stated the changes in the tariff law are needed because the current classification system was 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,’ reads 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.’

The existing law makes it difficult for government to calculate how much revenue will be gained or lost if customs duties are increased or lowered, according to the memorandum.

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