Over 600 products to see tax change at the port
Dramatic tax reform
THE Government will adjust the customs duty charged on over 600 products at the turn of the New Year.
Most of the changes in the revised Customs Act, which are to take effect on January 1, will see the introduction of a tax (five per cent in most instances) to goods that carried no duty charge up to now.
With Jamaica's importation of wigs and weaves set to hit $1 billion this year, the five per cent tariff that will be charged should provide the Government with a nice sum, while the over US$2.5 million spent on cigarette rolling paper last year suggests that applying a duty on some of the less conspicuous items is nothing to sneeze at in terms of revenue to be gained.
What's more, lubricating oils and grease, which cost Jamaica over US$20 million a year to import, will see the tariff rate climb from 25 to 30 per cent next January, although the additional revenue will surely be offset by the 10 percentage point duty reduction on watches, jewellery, precious stones and metals -- combined imports totalled over US$50 million last year.
Yet it is too early to say how the amended Customs Act will impact the cost of imports.
On one hand, imported raw materials used in food processing, including coffee beans for blending, vegetables, oats and other edible beans (which combined totalled over US$17 million last year) will no longer be zero rated and will attract a five per cent duty.
But manufacturers are to be exempted from custom duties on inputs provided that the commissioner of customs is satisfied those inputs can't be adequately supplied locally or by Caricom countries.
Similarly, the tourism industry will not have to pay duty on certain items that are to be used in a hotel or resort cottage.
On the other hand, the Government has lowered the custom duty charge on other hydraulic cement - an item that Jamaica spent close to US$8 million on last year - from 40 per cent to five per cent, while leaving the rates for other cement unchanged.
The move is likely being done to accommodate investment in a major port development over the next few years, although it stands to give up significant amounts of future revenue.