|Plan alters structure of import duty rates||| Print ||
|Thursday, 15 July 2010 10:43|
A proposed new import duty structure that goes into effect Aug. 1 will eliminate or reduce duty on food, baby supplies, construction equipment and materials, and “green” products, while increasing duty on alcohol, tobacco and luxury items, the Consultative Forum was told July 13.
The new system is “a gigantic step in the right directions” aimed at stimulating economic growth, reducing hardship on financially disadvantaged residents and collecting more revenue, said Permanent Secretary of Finance Delton Jones.
The new duty system for the Turks and Caicos Islands is expected to generate $52.5 million in the 2010-11 fiscal year, based on the new duty structure, improving economic conditions and improved collection.
Jones said the Ministry of Finance would be using various price monitoring methods to make sure that businesses pass on the reductions to consumers and not keep the savings. Those include the upcoming household income and expenditure survey and development of the TCI’s own consumer price index.
“Certainly businesses would recognize that it’s in their own self interest to pass on some of these benefits. Otherwise persons import more, form their own import clubs so they can bring their own items into the country,” Jones said.
The new system will follow international standards and be greatly simplified for both customs officials and customers, making the process easier and more efficient, Jones said.
Among the more important changes is the elimination of the 10 percent duty surcharge that was imposed in 1991 and was supposed to be temporary. That 10 percent surcharge has been levied on the combined value of goods, shipping costs and normal duty.
Also, duty exemptions that lost almost $60 million in revenue in 2008-09 also will be reduced and restricted.
Export duties, mostly on marine products, have collected little revenue — only $61,154 in 2009-10. All export duties will be eliminated, saving the cost of collecting such small amounts.
Customs Advisor Geoff Thorne gave the forum a glimpse of the changes to come:
Reduce current 12 and 25 percent rates to 10 and 15 percent, with some duty free. With the removal of the 10 percent duty surcharge, overall reduction would be 27.5 percent.
Fish not caught locally
Reduced from current 40 and 25 percent to 15 percent
Construction and manufacturing
10 percent duty on agricultural appliances and machinery, manufacturing equipment, building and construction equipment and materials
Baby and dietetic products, over-the-counter drugs, feminine hygiene and personal care products, baby napkins and liners, baby garments and clothing accessories, baby carriages.
Solar and wind generating equipment, solar panels, low volume toilets, water filtering equipment, biodegradable plastic bags and washing products, compact florescent energy saving light bulbs
Energy Star appliances reduced from 33 percent to 15 percent
Electric and hybrid vehicles — 10 percent
40 percent duty on imported fish and crustaceans that are caught in local waters, including lobster, conch, grouper and snapper
Products contributing to obesity and diabetes, particularly in children, including confectionery, fruit juices and high-fat content ice cream
Alcohol and tobacco
Luxury items including jewelry, vehicles and boats
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