The Jamaica Manufacturers’ Association (JMA) has called for a review of Customs Administrative Fees (CAF) and is urging the re-establishment of a public/private sector technical working group.

In a news release yesterday, the JMA said there is an urgent need for ongoing tax reform, which includes a review of duties and other charges related to imports and exports, and within the present context, the CAF.

The JMA was responding to this week’s Sunday Observer story reporting on the Jamaica Customs Agency charging CAF at twice the maximum designated by Cabinet in 2013.

The report noted that the agency has since been asked by the finance ministry to provided justification for charging up to double the maximum $20,000 per piece on goods imported.

The story also reported that there is growing concern among shippers that Customs’ apparent single-minded focus on raising revenue is stifling businesses and could result in the island losing a significant chunk of shipping and logistics revenue to other countries, particularly Panama, where rates are half those being charged here.

“Customs has standard fees, so it doesn’t really matter if it’s a commercial good or not, or if it’s below a certain value. There are companies that might just be bringing in spare parts, samples, bottle caps or other goods that is below US$200. But when all the charges are applied they are actually being asked to pay US$1,250 on these items, which is at least more than half of the value of the goods or sometimes more than the value,” executive director of the JMA, Imega Breese-McNab, told the Jamaica Observer yesterday.

She added that the Customs Agency is now aware of the issue as it continues to negatively impact many small manufacturers. Previously, requests were also made for a review of the CAF for manufacturers who qualify for Product Input Relief, both of which the JMA describes as a great cause for concern and a major impediment to Jamaica’s growth potential.

According to Customs regulation on duties, taxes and fees on imported goods, CAF is applicable to all imports and is calculated on the cost, insurance and freight value of all goods being imported. The fee also forms part of the personal and household effects of a passenger, if the value of the goods exceeds US$500.00.

The CAF, which replaced the Customs User Fee, became effective April 2013, in a bid to help the Government rake in $1.2 billion as part of efforts to broaden its General Consumption Tax (GCT) base.

But the new tax measure has left many importers threatening to shutter their businesses or implement ayoffs. Customs said it would conduct a review on the CAF associated with small packages (excluding D and E containers or Palletised loads) to ease the cost burden on importers of small components and equipment.

“We want to meet with Customs to understand exactly where the issue lies. Is it because of the fee and how it is applied, is it with the Customs broker, or is it because of how the entry is being done? That’s the first step,” Breese-McNab told the

Caribbean Business Report.

“But we really want a review of the CAF and we also want the re-establishment of a public-private sector technical working group on tax reform because this is where these matters would be discussed as they arise and a solution determined to benefit both parties,” she said.