Recent reports in the media have repeated false assertions about the Ministry of Finance’s proposal to require electronic submissions of all customs documents. In addition, individuals have raised questions surrounding the legality of this mandate.

The Customs Management Act explicitly gives the Comptroller the authority to require thesubmission of Customs documents in a format designated by him or her. This means that there isclear legal authority for this requirement.

The false assertions which are being repeated in the media are as follows: The Ministry of Financeis directing brokers and importers to a particular software vendor and this requirement woulddramatically increase cost to importers or force smaller brokers out of business.

Neither assertion is true and the fact that it is being constantly repeated in the media when evidenceto the contrary exist and is readily available is unfortunate.

The Click to Clear system is designed to facilitate electronic data interchange or EDI. EDI or thesending of an electronic file for processing dramatically lowers the cost of operation for both thebroker and Customs. As of June 2022, less than 10% of the transactions submitted to Click toClear was by EDI. Instead, they were submitted by way of the user interface (UI). A UI entry isa time consuming and error prone way of submitting entries. Independent estimates have placedthe potential annual revenue loss from errors in submitting entries by UI at more than $50 million.

The most recent estimate was provided by a consultant firm engaged by the previousadministration, so the need to improve Customs processes to eliminate leakage is nonpolitical andhas bipartisan support. The Government must act to recover this lost revenue and recovering thisrevenue loss by administrative means, in a high inflation environment, is more practical thansimply just increasing import duty rates.

EDI submissions while reducing revenue losing errors are also quicker, which means that theimporter can get his goods released by Customs much faster. A submission which can take daysto prepare under UI can be done in hours through EDI. This is why Bahamian software vendorshave been building EDI systems for Customs brokers and importers for a number of years, priorto the full automation of the customs processes. Many of these systems are now so sophisticatedthat no manual intervention is required for the import clearance process with invoices beingsubmitted into the company or brokers EDI electronically.

As part of this transition the Ministry of Finance previously advised the broker and importcommunity that it would be making available free two different versions of an EDI system. Aversion for licenced brokers, which is now being rollout and a simplified version which wouldfocus on commonly imported consumer goods, which is designed for persons who seek to do theirown customs entries.

The public is encouraged to visit the national Budget Website (www.bahamasbudget.gov.bs) tostay up to date on the latest news and information on the country’s fiscal matters.