Duty increase starts to pinch on Monday

| 31/12/2009

(CNS): Most non-essential imported goods will be going up in price on Monday as the new duty increases come into effect on 4 January 2010 with the implementation of the Customs Tariff Amendment Bill. Most things that have a levy will be increasing by around 10% following a 2% rise on the current average duty rate. Things currently charged at 20% go to 22% and those at 25% to 27%. Government officials said that the increase will not affect goods which were currently duty free under the old tariff as well as motor gasoline and diesel oil. 

The increase has been seen as a controversial move because it could have a significant negative impact on the man in the street and small businesses. However, government hopes to earn some $16.5 million from the increase in the tariffs to fill its cash strapped coffers. The hike has also been seen by many as preferable to the idea of imposing some form of direct taxation such as property or income tax which the UK wanted the government to impose in order to address the country’s financial difficulties.

Independent MLA for North side Ezzard Miller recently criticised the government for not taking the opportunity to change the current duty system across the board making it fairer and more beneficial to the wider community. He recently told CNS that government had missed the chance to correct a number of anomalies in the customs duty tariffs, improve health and stimulate local business.

He noted oddities such as duty free lard compared to a 22% tariff on olive oil, disappointed that the government did not adopt any of his suggestions he said, “I thought, since the government was reviewing the customs tariff, it gave parliament the opportunity to influence behaviour and encourage a healthier lifestyle,” he said. “Diet is a big problem in Cayman; most of the problem diseases in the community are diet related. Government needs to the lead the charge on healthier lifestyles and this was a chance to place a 22% duty on lard, a food stuff that’s bad for you, and reduce it on healthier oils.”

Category: Local News

Comments (12)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    I

    I wonder how long it will take both the government and residents to realize that we are no where near being "tax free". I can only guess that what we pay in duties would be the equivalent to what US residents pay in taxes. A tax is a tax, don’t let the name fool you…
  2. AwlyMilly Kins says:

    Awrite now…we need an increase in the amount of duty free allowance from CI $350 to at least CI $800. Who da raatid goin mee-ami and not goin spen more dan $350??? Krice!! US allows $800 before duties….since u like to follow da US…follow dat!!! Una killin people!

  3. Joe Bananas says:

    Goverment is not interested in what is good for the people.  goverment is only interested in what is more profitable for the Goverment.  People are where their money comes from.  If you want a better deal for your money you must get a job in Civil service. Or be an MLA.  This will not change.  Get used to a higher cost of living.  It will get worse as Goverment spending keeps going up to pay their needs.

  4. Anonymous says:

    "Diet is a big problem in Cayman".

    So right Ezzard.

  5. CB says:

    lol

     And as the fees and duties increase, Fosters, Ritz, Treasure Island Co, CUC, Morritts, Hurleys, and all other companies out there, will have an excuse to increase their prices and raise their rates on the consumer. We hear that the increases are necessary so that we don’t fail in this budget and introduce UK’s micromanagement over our affairs.  But from before the PFML was implemented in 2004, if our Civil Service would have just reduce its size and privatize certain sectors like Cayman Airways, we wouldn’t have had to deal with such duty increases to maintain a “fat” government. They are scared to trim and amend certain laws and regulations, because if they do, they will lose votes needed for re-election
     
    It may just be that IF we fail in this budget, with the New Constitution we have, nothing will stop the UK from enforcing taxation upon these islands. God forbid when the Governor mandates taxing the inhabitants. We have no one else to blame but our own leaders
  6. Anonymous says:

    Ezzard needs to understand that the reason why the Government paid no attention to his LARD versus OLIVE OIL fantasy, is because no one uses lard anymore. On the other hand Olive oil is very popular and used by many consumers, therefore if the Government reduced duties on Olive oil and increased it on lard they would end up with less duties collected.

    The problem here is cash, not some mumbo jumbo fantasy that is believed to be good for your health. I use Olive oil and dont really know weather it is any better for my health than lard or any other fat for that matter.

    There is so much contradicting information out there thatone dont know which is fact and which is fantasy.

    We will soon say we should get rid of the jerk stands too because the Lard is a product of the Pig, which some doctors claim is the other white meat.

  7. Common Sense says:

    There seems to be a misunderstanding of the actual duty increase and I hope that merchants through this misunderstanding do not pass on a 10% increase to consumers.  The duty RATE itself will increase 10% i.e. from 20% to 22%. However, it is important for people to understand that the actual increase in dollar cost of imported goods is only 2%. 

    For example, a $100 worth of goods imported previously cost the importer $20 and the same $100 worth of goods imported with the increase will now cost the importer $22.00.  This is an actual 2% increase i.e. $2.00 for every hundred and NOT a 10% increase or $10.00 for every hundred.

    • DUH!!! says:

       True, it is a 2% increased cost on goods, but it is a 10% increase in the amount of duty paid – as clearly stated in the article!!!  And for you fans of bubbly wine, duty is going up 100% – and in some cases this is also 100% of the value, since the duty is calculated on volume…

      • Anonymous says:

        I disagree with you:  The article wasnot clear.  It implied a 10% increase in total cost, not in the amount of levy levied:

        It stated " Most things that have a levy will be increasing by around 10% following a 2% rise on the current average duty rate."

        It did not state "a 2% increased cost on goods, but it is a 10% increase in the amount of duty paid"

         

        • DUH!!! says:

          "Things currently charged at 20% go to 22%"

          That is 10% increase on the duty – any way you look at it… A 10% increase in the total cost OF DUTY…  The levy increases by 10% with the 2% additional charge. 

          Is it the english or the math that has you stumped?

          Fact of the matter is – this is a broad description encompassing MOST of the rate changes – as noted before, this 2% additional duty amount is anywhere from 2% to 40% of actual additional increase depending on whether it is goods currently charged fron 5% to 100% duty.

          That clear the fog for you?

          • Anonymous says:

            Regardless of what the article said perhaps CNS will publish this little price change tomorrow to show what merchants can justify charging rather than let them push prices up 10% and point finger at CIG.

                                                         Before                   After

            Cost of good imported    US$50                        50

            Duty @20%                              10                        11   (22%)

            Total cost to merchant            60                          61

            Fixed Markup                           60                          60

            Selling price                           120                        121     

            Price increase to consumer  0.8333%       – merchants you have been warned…we will not accept more than a 1% increase !!!

            Please publish CNS and correct a wrong !!

        • Simple Simon says:

          A two percent increase in duty is a 10% increase in the amount of duty charged since most goods are currently 20%.  I get it.