THE Jamaica Manufacturing Association’s (JMA) lobby for a waiver of the Customs Administration Fee (CAF) on intermediate goods has proved successful.

Effective February 1, manufacturers should see a 50 per cent reduction on the importation of intermediate goods — items which have to undergo further processing before it can be sold as a manufactured good.

In 2013, the Jamaica Customs Department’s implementation of the CAF resulted in manufacturers paying up to 400 per cent more on the import charges of manufacturing inputs needed for production. The new duties also resulted in an erosion of the sector’s competitiveness, according to the JMA.

In response to the changes, several business operators, led by former president of the Jamaica Manufacturers Association Omar Azan called on the government to reconsider the amendment to the tax law. It was agreed that the association should seek further clarification from the government and Jamaica Customs, especially as it related to the administration of the processing and stripping fees for each shipment and container.

“This is one example of how collaborative effort can yield the right results,” JMA president Brian Pengelley stated in regard to the discount on importation fees. “Manufacturers have certainly been feeling the pressure since this relief was removed in December, and this decision by the government will assist in managing the input costs to the manufacturing process, the potential impact on consumer pricing and encourage investment in the sector.”

In a release, the president welcomed the move by the government and thanked the Minister of Finance and Industry, the Minister of Investment and Commerce and their teams, along with Jamaica Customs, for understanding and addressing the issues which stemmed from the reclassification of raw materials.

Previously, manufacturers only benefited from a 50 per cent reduction on the processing and examination fees for container loads of raw material imports. However, Pengelley stated the JMA will continue to lobby for initiatives that will positively impact the competitiveness of the sector.

“We cannot afford for manufacturers to close their doors and relocate to other countries. We must continue to work together as the private and public sectors to foster a facilitative business environment and stimulate economic growth,” he said.