A year and a half after changes to the Cayman Islands’ customs tariff system were first proposed, it appears the Legislative Assembly could finally be set to approve them.
The Customs Tariff Bill (2009) has been placed on the agenda for the upcoming session of the house.
The earlier version of the bill proposed sweeping changes to how the Cayman Islands charges tariffs on imported goods.
However, lengthy discussions with local merchants ensued and lawmakers have since rewritten the bill. A draft of the latest proposal has not yet been made available.
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 list proposed in 2007 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 2007 bill contained 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 (2009) 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 changes do 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 2007 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.
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 said using that updated system will help facilitate international trade.