Customs backtracks on confusing tariffs

The new customs coding system that has caused outrage among importers will be amended since the system has been found to be “tedious” and “not working,” Premier Alden McLaughlin announced Thursday. 

Changes to the tariff law in April meant the number of categories of items that needed to be declared with an eight-digit code jumped from 300 to 5,000, increasing both time and hassle for businesses during the importation process. 

Changes were made after “cries were not receding” from the business community, the premier said.  

The number of codes will be almost halved as of Sept. 1, the premier said in a press conference with Minister of Finance and Economic Development Marco Archer. 

“The law will be amended so at first we will reduce the number of codes, which are now at 5,000, by what is called rolling up a number of them, so in other words, the breakdown is not as detailed as is currently the case and, secondly, for those who do not wish to actually have go through their codes and record individually each item, customs will on take that responsibility. We are proposing to introduce, in respect to that, a small administration fee of $5,” Mr. McLaughlin said. 

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Customs officers will complete coding the items after the forms have been submitted, he said. 

“You can produce those documents, pay your duty and walk away and leave it to customs to go through the rather tedious exercise,” Mr. McLaughlin said. 

He said “detail work” was still to be done but said the objective of the exercise was to ensure the government still had the ability to capture the statistics it needed but avoided challenges and problems for businesses. 

“It is clear that the present system is still the subject of a great deal of anxiety,” Mr. McLaughlin said. “Some adjustments have to be made because it’s making it difficult for businesses.” 

Mr. Archer said customs would only continue to offer the $5 service until importers were familiar with their codes. 

“The change that we are about to make should resolve the issues we have been hearing about,” Mr. Archer said. “Over time, ideally, we would prefer the importers do complete the forms themselves.”  

Electronics 

The conference also addressed the customs issue of travelers being required to register all electronic devices prior to departure, or risk having to pay 22 percent duty on their items upon return. 

Premier McLaughlin said despite the policy having been in place for about 30 years, it is not a requirement.  

“There has been some confusion about what it is that customs is trying to do,” Mr. McLaughlin said. “I haven’t registered anything of mine and I don’t intend to. 

“We haven’t had any feedback that people are being given a hard time over electronic devices.” 

He said the onus is on the passenger to be able to prove the goods were not subject to duty. 

Mr. Archer said that, while it is not mandatory for electronic devices to be registered, it is for the passengers’ benefit. 

Retail duty reduction 

The government officials also addressed the general duty rate reduction that came into effect for licensed traders this summer. It was believed the reduction from 22 percent to 20 percent would transfer to lower prices for consumers.  

Premier McLaughlin said he hoped competition would be the driving factor to encourage businesses to transfer the reduction to consumers.  

“There is no government mechanism for price control,” he said. 

Chamber of Commerce President Johann Moxam said the Chamber welcomes the changes.  

“The Chamber of Commerce would like to congratulate the government for reconsidering and shifting its position with regard to the customs code issue …,” Mr. Moxam said. 

“They should be congratulated for listening to organizations like the Chamber and, more importantly, the general public who raised the concerns. We’re pleased to know something positive is being done about it.”  

Customs-Conference

Finance Minister Marco Archer, Collector of Customs Samantha Bennett and Premier Alden McLaughlin announce changes to customs policies.
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7 COMMENTS

  1. But why on earth would you need even 3,000 codes.
    I would have thought that about 10 should be enough.
    1. Taxable food
    2. Non-taxable food
    3. Low value cars
    4. High value care
    5. Non taxable cars and other transport
    etc.

  2. …He said the onus is on the passenger to be able to prove the goods were not subject to duty. …
    This statement is too ambiguous.
    Electronics dominate the world; and humans today rely upon to live their day to day lives. Whether they are for communication, entertainment, or business, electronics have become a huge part of daily life for majority people.
    Bring your laws up to date and be absolutely clear about electronics.

  3. Hats off to the Premier and Finance Minister Archer on their reconsideration of the policy regarding lap taps i Pads, smart phones etc. It is good when a leader(s) can see flaws in intended laws and make adjustments.It means that you are listening to your people,which is always desirable. You saw that this intended policy was more of a punitive measure rater than revenue raising and adjust it accordingly. That is flexibility.

  4. Cayman Compass you have once again reported the news inaccurate! It is not a requirement by law as you stated to register electronics. The registration process is optional and it does not apply to visitors or Buss travelers. Kudos to Customs for providing another option of online registration.

    ***Editor’s note: To the contrary, the Compass has not reported that the registration process is "mandatory" — rather, that not doing it would put travelers at risk of having to pay duty upon their return to Cayman.***

  5. Customs has not backtracked…. the process is still required to code your invoices with commodity code, they just saying they will do it for you for a fee. I would rather pay 5 any day then figure it out but then that’s why you have custom brokers!

    Move on from Customs Compass, your infatuation with their operations and processes are becoming exhausting and boring.

    Lets talk about the real major issues of this country!

  6. a non issue it is done all over the world I have done it in other countries when I imported for my businesses. Why a problem for Cayman now?

    Glad to see electronic registering of items is available then I don’t have to go to wait in the long lines at the Customs locations.