OPPOSITION spokesman on Finance, Audley Shaw, has suggested that the Government suspend its new Customs Administration Fee (CAF), pending resolution of the problems it has created for importers.

“My advice to the Government is that, if the system is not ready then suspend it, because already it must be affecting revenue at customs,” Shaw told a press briefing yesterday, a day after his 2013/14 budget presentation.

“It is not only an inconvenience to people getting their stuff, it is affecting their revenue. So, if the CAF is not ready and it is turning out to be much more difficult to implement, suspend it, work out the difference and, when it is ready, go back to it,” Shaw told the briefing at the Jamaica Labour Party’s (JLP) headquarters on Belmont Road in Kingston.

Local importers have described the new fee as “a nightmare”, with many predicting closure of their businesses or massive layoffs if it continues in place.

The CAF, which replaced the Customs User Fee (CUF) on April 1, is projected to bring in $1.2 billion in revenues as part of Government’s efforts to broaden the General Consumption Tax (GCT) base. But, importers affected by the change have said that the contracting economy and the additional tax burden will force them to lay off workers.

Shaw said that the issue was both in terms of the implementation of the CAF and the system. He said that it is militating against particular sectors of the import community, including small importers who have to pay a higher flat fee regardless of the nominal value of their goods.

“A person importing $100,000 worth of goods has to be paying the same $55,000 flat fee, as one who is importing $10 million worth of goods. That doesn’t make sense!” Shaw pointed out.

He said that the CUF, which it has replaced, was more equitable as it charged two per cent on the value of the imports.

He suggested that the Government either retain the CUF system, or change the CAF concept to the same as the CUF, to institutionalise equity in the system.

The tax measures have also not gone down well with the MSME Alliance, headed by Rosalea Hamilton.

She lamented the Government’s continued disregard for the sector and its tardiness in presenting a clear policy direction, in an interview with the Jamaica Observer.

“We continue to see a governance arrangement that excludes the voices of micro, small- and medium-sized businesses,” Hamilton said.

Yesterday, the Customs Department acknowledged that there were glitches in the system, but explained that the “refinement of errors” was far advanced.

“The department has taken the decision to resolve various issues that arise through upgrades rather than to wait for the holistic overhaul of the system which would result in longer delays for importers. In the interim, Jamaica Customs continues to communicate with our stakeholders to satisfy all requests and reported issues in the quickest possible time period,” the statement said.

“The department is aware of the challenges being faced by the brokers with regards to the system updates; however, continued facilitation of cargo clearance is being done through letter clearances, the manual collection of additional revenue where there are errors and allowing importers to clear on old entries in the case of short shipments,” the statement said, adding that “members of the Customs Management Team have also been deployed to strategic areas to address the concerns of clients in a timely manner.”