Government will be revising its master list of duties on imported goods, Finance Minister Ryan Straughn announced in Parliament on Tuesday, claiming that “updated tariffs” will ensure the State is not cheated out of revenue.
Decades after the value-added tax (VAT) was introduced to bring an end to most duties, imposts and indirect taxes, Straughn has followed previous administrations in introducing a new Customs Bill that may slap higher rates of duties on goods.
Straughn dismissed any notion that Customs was charging excessive duties on items, explaining that products appeared more expensive here than what may be seen online because of the cost, insurance and freight (CIF) of the item, on which the duties are calculated.
Singling out part 11 of the new bill, which speaks to the calculation of customs value of goods, he explained that globally, duties have been calculated on the CIF.
But at a time of rising commodity prices due primarily to the disruption in the global supply chain, the finance minister dangled the possibility of absorbing some of the costs associated with the importation of some items.
“Yes, in the short-term, there may be some issues that we can resolve with respect to whether we cap the freight or what have you,” he told lawmakers.
But that hope appeared slender as he further said that based on information from Customs, “we have not necessarily seen the increase in the per kilogram freight cost that have been cited as consistently or considerably different from the pre-pandemic level”.
He added: “That is just from looking across the range of products that have been imported, and we are monitoring the situation very carefully to see how the Government can respond, but we have to mine the data and we will continue to mine the data with respect to that.”
Casting further doubt on any significant ease in the taxation in goods in the heavily import-dependent nation, the finance minister said it was unlikely for Government to absorb costs at this time owing to a decline in revenue and it would need to increase funding in some areas. The capacity for Government to absorb is contingent on the amount of revenue we are capable of collecting within the context of the COVID environment,” he said.
Straughn suggested that Barbadians import items from within the Caribbean Community (CARICOM) as their first choice, pointing to the duty-free status that regional goods are supposed to enjoy under the CARICOM Single Market (CSME).
Made-in-CARICOM goods would have to carry a certificate of origin in order to benefit from the duty-free status. The tax framework does not, however, cover the base price of the item which may be higher than a comparable good imported from outside the community.
“It is nothing that the customs officers do,” he declared. “It is nothing that any of us in here do. This is an agreed framework within the context of CARICOM and therefore, Customs, in exercising one of its critical roles, is to try to determine the origin of specific goods.”
With the last updated tariff being done in 2017, Straughn revealed that a new one was being worked on.
He said: “I am very clear that come next year, if not early 2023, we should be in a position to implement the tariffs for 2022 which is now being worked on to be rolled out.
“I say that because as we have been reforming; the public must come to the realization that reform means you must keep pace and therefore Barbados must continue to lead and not find ourselves disadvantaged. At the end of the day, with the dynamics of products changing rapidly, then based on what is going on within the market, you set your tariffs according to what those demands are.”
The finance ministry is working closely with the Barbados Chamber of Commerce and Industry to iron out any issues relating to tariff classification, the minister told the House of Assembly.
The Ministry of Foreign Trade is also collaborating with relevant bodies to “bring the new tariffs into line and make sure that they are done such that the Customs department is in a position to implement and reduce issues with respect to classification”, he added.
In relation to items that are no longer included on the tariff system because they were no longer being produced, Straughn said Customs would still be able to facilitate their importation.
A system is to be put in place where individuals could give early notice of their intention to import an item and get an idea of what the tariff would be before they actually carry out their transaction, he promised.
Straughn said: “The facilitation that we are seeking to achieve within the context of the reform, is to provide that framework such that persons can actively engage the Customs Department, get certainty about what would be applicable if I bring in these items and they are not in the tariff what I would have to pay.”
marlonmadden@barbadostoday.bb
