$10 Stamp Tax On All Shipments

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July 28, 2008

The government moved yesterday to tab on a $10 stamp tax to all freight shipments entering the country, from food to furniture to computers — the last item supposedly "tax free".

The move sent customs brokers, already struggling under the weight of monumental changes to the tax regime, scrambling to make sense of this latest, unexpected and unwelcome addition to the customs schedule.

Local broker Cynthia Dames was among them.

She got the shock of her life yesterday morning when in the midst of clearing a transaction for a customer she was informed of a new $10 stamp tax tacked onto each and every bill of lading for freight flown, sailed or slung into the country.

"Nothing is duty free anymore," she told Guardian Business. "We just found out [Thursday] and we are in shock and upset.

"I mean what more can you put on the poor people, everywhere all food items are going up, but salaries can't go up to pay for it."

The $10 stamp tax apparently applies even to items now introduced with great fanfare as entirely tax free by the Prime Minister as part of his budget communication. Last May, Ingraham in fact pledged to eliminate stamp tax on a whole swath of items.

"We will...eliminate import duties on a number of citrus fruits, as well as frozen vegetables," he said as part of his address in the House of Assembly, "eliminate import duties on cereals, oatmeal, and breads; exempt personal computers, printers and software from the current stamp tax, thereby making them completely duty-free; make duty free the import of energy-saving light bulbs, solar lamps, batteries, converters and wind engines."

The PM did not return Guardian Business calls Thursday.

In his budget communication, he made no mention of this latest customs fee, one which brokers say they were informed of only yesterday. While, that 10 bucks represents only a nominal increase, they concede, its application is an indication of how awkward overhaul of the customs duty schedule has been, to say nothing of its implementation.

The brokers and the merchant customers they act on behalf of continue to voice concerns about the government's move to lump stamp tax and customs duty into one tax. At the same time it also moved to round up that combined duty to 10 percent, another 3 points. It's something the government has billed as a way of facilitating import calculations.

It has, however, failed to win that kind of efficiency gain.

"You have to be a Boston lawyer to understand the customs duty schedule now," said one broker Thursday.

That's unlikely the reaction the administration was looking for.

"This will be one important element in our overall strategy to make it easier for taxpayers to deal with government and to comply with their tax and fee obligations," Ingraham said two months ago.

From a productivity standpoint, $10 stamp tax fee may dissuade merchants from receiving small or single item shipments and encourage them instead to wait on other import items from a foreign supplier in order to lump them together and reduce import fees.

On the ground it means a consumer may have to wait longer for that single gasket for her car or that coffee table for her living room.


News date : 07/28/2008    Category : Business

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