Customs tariffs on nearly all dutiable imports within the Cayman Islands will increase starting today.
Those imported items that were not subject to tariffs prior to today will remain duty free. The tariff increase also does not apply to gasoline and diesel fuel.
Generally, the increase for most imported products that are subject to duty will be two percent. For instance, an importer paying $2,000 for a Jet Ski would have duty on that item go from 20 per cent to 22 per cent. So the duty on that item would go from $400 to $440.
That represents a ten per cent increase in the amount of duty, but would only amount to a 1.6 per cent increase in the overall cost of the Jet Ski to the importer.
However, the two per cent increase in duty is not entirely across the board.
Importers of sparkling wine will actually see a 100 per cent increase in tariffs, going from $3.75 per litre to $7.50 per litre.
On the other hand, those importing pesticides, insecticides, herbicides, vermin poisons and the like will see a previous 15 per cent duty charge removed. Those items are duty free under the new customs schedule.
Those seeking to bring older vehicles into the Islands will now have to pay an additional $1,000 Environmental Tax as well as the duty on vehicles, which now ranges between 29.5 per cent and 42 per cent depending the vehicle’s value.
The customs tariff increase is one of the government’s major revenue raising initiatives aimed at balancing the Cayman Islands budget in the current 2009/10 fiscal year. The tariffs are expected to bring in an extra $16.5 million during a full 12-month period.
Because the new fees are only being implemented in January – half way through the budget year – government expects to earn some $10.9 million from the tariffs through 30 June.
Other major increases in fees, including work permit fees, and a new 10 per cent business premises tax on commercial rental properties are still to be approved by Cabinet and the Legislative Assembly. The next meeting of the LA is expected to occur later this month.