A proposal seeking to expand and further specify the list of dutiable items imported into the Cayman Islands is expected to come before lawmakers within the next few months.
It will be at least the third time within the past five years that government has attempted to introduce what’s known as a ‘harmonised customs tariff system’ that would allow it to more accurately predict how much money is expected from customs duties each year. A copy of the Customs Tariff Bill, 2011, also states the “governor in Cabinet may by order amend any of the schedules”, referring to fees in the tariff lists.
A statement from the Premier’s office indicated that section of the proposal does not actually give the Cabinet any new rule-making authority.
“The governor in Cabinet currently has the authority to waive or refund any duty under the … law,” the statement read. “However, any future amendments or changes to these or any law must be passed by the Legislative Assembly.”
The revised tariffs bill itself, which includes some changes in dutiable amounts charged for certain items, will also have to be approved by a vote of the full Legislative Assembly.
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 Islands. The list is a little more than nine pages long and contains 22 separate sections for items such as live animals, vegetable products, textiles, footwear, food, wood products, cars, aircraft … almost anything that someone would want to ship in.
The dutiable items list, initially proposed as part of a legal revision in 2007, contains the 22 similar sections – but it is more than 200 pages long and is broken into far more detailed descriptions of imported items.
The 2011 version of the bill is essentially the same, according to Customs Collector Carlon Powery.
The proposal 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 current bill importers would have to pay a duty.
In other areas duties were not increased. For example, in the current Tariff Law there is one listing under the category of “prepared foodstuffs” for cereal, which includes breakfast cereal.
The revised 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.
“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, 2011, 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.”
Delays
The years-long delay in implementing the new tariff system had left local customs officials baffled to some extent.
Mr. Powery told a meeting of Cayman Islands Chamber of Commerce members in November 2010 that “political will” seemed to be the only thing holding up the introduction of the harmonised tariff system that is now used by most of the Western Hemisphere.
Mr. Powery acknowledged Wednesday that Cabinet had since “given its blessing to the bill” and that he expected the measure to move to the full house for approval.
One of the main reasons the more detailed duty list is needed, customs officials have said, is to predict with more accuracy how much revenue from tariffs government will make each year. With no direct taxation in the Cayman Islands, customs duties are one of the public sector’s main sources of yearly earnings.
Chamber of Commerce members who attended the November 2010 gathering were not all in agreement about the harmonised system being a positive addition.
Local business owner William Adam said he thought the new 200-page list of dutiable items was simply too massive for small company owners to manage, particularly if those companies had not yet migrated to computerised records.
“So now, you not only have to break down the item and take it off the invoice, you’re going to have to break down the shipping duty as well,” Mr. Adam said, adding his concern that the change could increase the cost of doing business in Cayman.
“The Cayman Islands is not the cheapest place to do business,” he said. “(This) is going to be very expensive and time-consuming.”
Assistant Customs Collector Langley Powery said there had been some reluctance from traders to the harmonised tariffs system. However, he said once the system is in place, things should go more smoothly for business owners.
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It’s immoral when a government charges taxes on an essential in life like food! Under no circumstance should people have to pay duties for food. Government need to get out of people’s lives once and for all.