Duty may impactXmas trade
(CNS): Goods imported into the Cayman Islands could be reflecting government’s duty increases as early as in one week if the bill passed in the Legislative Assembly on Wednesday is fast tracked to the gazette stage. That means the increases which will result in price rises at the till could have a direct impact on Christmas shoppers. The changes in fees under the amendments to the Customs tariff law 2002 include the two percent hike on most items that carry a levy, as well as an increase in the package tax and the introduction of an environmental tax on imported used cars.
Part of the government’s revenue raising measures in the 2009/10 budget, most of which come into effect in January, the duty changes will be implemented as soon as possible. As a result, consumers who leave their shopping until the last minute could be paying considerably more for their Christmas list this season after an already tough year.
The bill increasing duty rates was one of five passed in the House on 2 December including the bill which introduces an annual licence fee for money transfer companies, as well as a 2% charge on each transaction where money is sent out of the country via a money service business. The 2% is capped at $10, and with no implementation date this new fee will also come into effect as soon as it is gazetted, which could mean before Christmas.
Legislators also passed three bills affecting the financial sector, including the Public Recorder Law, which provides for the increase in a number of fees associated with registering documents. The Monetary Authority Law not only increases fees paid to CIMA for certain regulatory services but also allows government to take as much as $10 million from CIMA for use in the general treasury, and the Companies Law, which will, among many other things, increase the cost of registering a company in the Cayman Islands. The premier, in his role as minister of finance, told the LA that this bill was expected to raise some $20 million for the treasury.
During the presentation of the bills, the opposition questioned whether they would have the desired affect in balancing the country’s budget as hoped. The PPM member for George Town, Alden McLaughlin, also asked whether, given the current situation with the world’s economic turmoil, it was a good time to see how government earnings were doing so far. He asked if the minister could provide an update on how revenue and expenditure were performing as the country was almost at the half way point in the fiscal year.
“We invite the premier to the House with an update of the indications as to how well the budget projections are performing. We believe it is important to understand how likely it is the targets will be met,” McLaughlin said. He warned of the dangers of not closely monitoring revenue performance, something which he said his administration had experienced when they learned how the projections they had been given had fallen far below expectations.
McKeeva Bush, however, criticised the opposition member for asking and said that he could not provide an update as only a few of the bills had been passed that were expected to boost the government coffers.
During the course of the day the war of words over the budget between government and opposition escalated as the PPM Members pointed out that, while the new laws may not have had time to impact government revenue and spending, they were not the only source of government revenue generation and government had been hopefully earning as well as spending money over the last six months, which could give an indication of whether or not it was on target.
The premier accused McLaughlin of politicking and hypocrisy as he refused to give an update on how revenue and expenditure was doing at that moment. Bush said the bulk of government revenue came in between January and March and that’s when he would update the country. Bush rebuked the MLA for raising the issue, as he said it was him and the leader of the opposition that had spent all the money that had put the current government in the serious and challenging situation. “Don’t come in this House beating up the government,” he said, maintaining that they were the ones to blame for the financial mess.
Category: Headline News
What about cutting McKeeva’s big fat cheque??? The other MLA’s as well…
What about a decrease in their salaries as they make thousands of dollars every month, far more than any of us poor, minimum wage makers?
And that is why we all fly off to Miami to do our Christmas shopping!
The Government needs to cut costs by trimming all the unnecessary bureaucracy and red tape needed to get anything done and unshakle this economy from overbearing government control.
And I will be unpopular for saying it – but taxes are needed. Clearly the current system of indirect taxation is not working and simply driving business away.
I have less of a fear impacting the Xmas trade, but more of a fear that merchants have been stockpiling at the current rate, but when the new rate does into effect, will pass the "new rate" on to use, even though they paid the old rate for the items. This is a windfall for any savy business owner, and should be addressed possibly in the implementation of this to ensure there is no price manipulation.
I seriously doubt that there are any businesses that can afford to stockpile anything in this economic environment. This is not a good business practice anyway as retailers would rather not stockpile but order as needed. When you do something like this your warehousing and other costs skyrocket.
Give the retailers a break. Not all are as dishonest as you paint them.
The retailers aren’t helping by still demanding massive profit margins on their goods. Regardless of the duty charged already the profit margin of 40-200% charged on most imported goods by retailers is unacceptable, they are pushing business abroad.
An example was buying an ipod for xmas. The cheapest retailer on island wanted 225CI. In the end I bought it online and got it shipped from the US. It cost 165US shipped so 165CI with the duty. Plus it was a big retailer so I know if it breaks I can send it back which I couldn’t locally as few traders accept returns.
On just one item I saved 60 dollars, I’m all for giving business to local traders and the local economy but in return all they are doing is ripping me off. They need to stop being so greedy and unhelpful and trim down their profit margins like every other retailer in the world.
The 2% hike in customs duty is pretty small compared to the increase in ‘inspection fee’ or whatever the thieves want to call it. I now pay $5 plus the 20 or 22% duty on all xmas presents I recieve from family for the kids. $5 per item is a big jump from the previous 2.
The only winner in all this is going to be Cayman airways as we take more frequent shopping trips to Miami. The losers will be the government losing tax revenue and subsidisng my CA flights and of course the greedy local cartels afraid to lower their prices below their price fixing rivals.
What model ipod and how much memory?
Latest model, top end, 16gb is $169. Amazon prime get it delivered free in 2 days in US. You can declare it, or as many do, not. Truth is, I could order 20 of them from Amazon, deliver to Miami, ship them to Cayman (about $15 in a container – all costs included) and land them here for about $175 CI each, duty paid.. So if I sold them locally for $200, I would be making a 11% profit – not bad. And guess what – local retailers buy wholesale – so not through Amazon at Amazon prices. They really are shafting us!!!
I find it really hard to believe that you got something shipped to Cayman for free. If you did please post the website that delivered it to you free of charge. Government charges duty on freight so I am not sure how you avoided that one. I think you will find in the end if you are being totally honest that you paid a very similar amount if you had bought it here.
Just so that you are aware retailers have to pay freight and duty and duty on the freight, port authority fees, trucking from the port, insurance of at least 1% on all items plus we have to pay the personnel that sell the item to you and we have to pay CUC, Cable and Wireless and the Water company plus our rent if applicable. Add another ten percent on top of all of that for the the new duty hike and think again as to whether we are overcharging or not. We are also facing another 10% duty on rent as well.
It will be survival of the fittest going forward as the new tax hikes will do some of us in.
Your attitude that we are ripping you off is flawed and one of the reasons that our economy is in decline is because people like you wouldrather invest in the US economy and not your own. If you were buying here and stimulating the economy, businesses would thrive bringing jobs and security particulalry to Caymanians.
I am glad you saved the $60 and I hope your job is not in jeopardy as you and others continue to invest in the US economy rather than realising that the job you might be saving by purchasing locally may just be yours or that of a close family member.
I encourage everyone to buy Caymanian whenever possible. Sure there are some unscrupulous retailers out there but for the most part we are hardworking honest people, putting money back into the economy by paying fees, providing employment and helping to stimulate the economy.
Shipping wasn’t free, the price quoted was including shipping. By making use of discount codes and some great sales there are great deals.
I had to pay duty and duty on shipping, insurance etc and I don’t get discounts for bulk buying liek local retailers, so they have no excuse. Yes they need to pay the bills and make a profit, but like every other retailer in the world they have to trim their margins and earn less profit on each product if they are to keep up demand.
And it was a16gb nano series 5
OK that model does sell at Walmart for US$165+ currently on sale at that price and with free shipping to a US address.
As a retailer in Cayman for 25+ years my experience up to a few days ago is that when we import a fully loaded 20 ft container all of the costs involved for shipping amounts to not less than 45% and up to 55% depending on how bulky the merchandise is. This brings the landed cost to a retailer of CI$207 at minimum. So if a retailer on island is willing to sell that for $225 and provide a gurantee to the consumer that is a super deal for the consumer – but that retailer will be out of business in a short time because that profit level is insufficient to sustain the retailer.
Further the retailer in Cayman cannot buy any quantity of that ipod wholesale for as little as US$165. That is a promotion by the largest retailer in the world. My experience is that retail promotions like these are below the wholesale costs.
But I get your point andagree with you that retailers on the island need the local consumers support and we should all strive to offer as low prices as possible, upstanding customer after sales service and shopping convenience for our customers.
You need to examine the supply chains if that is the case. If you are paying 40 dollars an ipod to ship it to the island then once a month you need to take a trip to Miami and bring the full 2 suitcase allowance back with you, even if you don’t have the savvy to buy online and get retailer discounts and coupons you will save a fortune. You only need to bring back 6-7 ipods and you’ve made back your $280 shipping cost. bring back 100 and you’ve drastically reduced your costs.
What you are basically saying is that due to the inflexibility and lack of business sense, the local traders like yourself are overpaying massively for their goods and then passing the inflated costs on to the consumer. My argument is therefore, why should the consumer pay you an inflated price for something they could get cheaper elsewhere and if you were a better business person could have gotten cheaper elsewhere and given them a better price.
It’s like asking them to pay for your incompetence.
I would start by going to a basic business studies class at school and learing about business. Then you may get some of the skills needed to run a business competently. Then start by finding better suppliers and better shipping options. Small retailers don’t need a whole 20 ft container, if they are selling small electronic items they could ship a small pallet and save greatly.
If a member of the public can buy it for 155USD in the states and get it shipped for 10 bucks by dhleasyshop then even a retailer could do that. They could order 100 from walmart no problem and probably pay under 100 bucks total shipping as they are so light. Why pay extra for a pallet just because that is what you would normally do. The public are being more astute and researching their transactions, if you did the same you would find that you can get a better deal on your buying and pass some of the savings on to the consumer whilst boosting your own bottom line.
By using the same supply chain and ideas that worked 25 years ago you are not providing good enoughservice to the Caymanian people, they deserve better than you. They may have stuck with you when times were peachy, but now they are not they cannot afford to pay for your lack of flexibility and not moving with the times.
Thanks local retailer for your post. You forgot to add other retailer costs such as delivery from the vendor in the United States to the freight forwarder, loading the container in Miami which varies from $275 to $600 and delivery of the container to the Port in Miami. My perception is that the majority of retailers on island stay in business only when they are competitive in the areas of prices, customer service, warranties and after-sale services – all of which benefits the customer, the economy and the country. And prices are generally good when we look at the whole picture.
Your greed is the reason the local economy is in the toilet. Don’t blame the consumers. Weall need to tighten our belts. Whilst all over the world retailers are cutting their margins to sell their goods at affordable prices the greedy con merchants in Cayman continue to fleece the public.
I buy locally whenever possible if the prices are fair and reasonable, but so often they are not. You can talk up your fees and shipping costs but the fact of the matter is if a consumer can buy and ship and item here cheaper than you then you need to examine your suplpy chains and busness acumen.
BWIE will ship a large box full of ipods (or whatever) for 30 bucks so don’t talk rubbish about paying hundreds of dollars to ship each item. You are just trying to justify ripping off the public that have been so good to you and your families over the years. It is time to give something back and reduce your abhorrent profit margins in these tough times.
Well said and everyone’s thoughts exactly… for years!
I just bought a TV for $800USD landed that would have cost over $2000CI had I purchased it here.
Clothing is overpriced for the quality that you get. Food is overpriced and on the verge of spoiling. The list goes on….
I will gladly pay my duty at the airport instead of local retailers pockets.