OBA backpedals on customs tariffs
The Bermuda Government has been forced to back-pedal on revenue-raising customs amendments that had been expected to bring in almost $20 million.
The reversal spells a last-minute scramble for businesses, some of which had already priced goods for import according to the new duty rate changes in the latest Budget.
However, an e-mail sent to importers on Tuesday, seen by this newspaper, advised that the Ministry of Finance was “reconsidering” the proposals and needed to revise them.
The message from the Customs Department called on businesses to cease updating their accounting systems with the new tariffs and to wait for updated rates.
Principal customs officer Dean Lema wrote: “The Customs Department has been informed that the Ministry of Finance is reconsidering the previously issued duty rate changes for the 2017 Budget.
“Please cease any updates to your systems based on the previously issued Excel workbook or pipe delimited file which were e-mailed to you on March 4.”
The issue was raised in the House of Assembly during the Budget debate with Bob Richards, the Minister of Finance.
Noting that a change in the rates would have a direct impact on the Budget, Opposition leader David Burt pointed out that the government’s debt ceiling was just $30 million away and the changes could have ramifications.
“The revenue figures in the Budget may not actually be correct,” Mr Burt said — subsequently telling The Royal Gazette that calculating customs clearance represented “a very large enterprise” in order to have products ready for April 1, when the new rates would go into effect.
Parliament’s last day to debate the Budget is scheduled for Monday, and the Customs Tariff Act, which must wait for two parliamentary sessions before being debated, has not been tabled, Mr Burt said.
“I can’t understand how the Government issued this advice, and yet the minister has made no statement to Parliament on this change,” the shadow finance minister added.
While the changes announced in the 2017/18 Budget left essential goods untouched, rates were increased on higher-end goods.
There was no response yesterday in the House of Assembly, where Mr Richards focused on the imperative for eliminating Bermuda’s deficit as “the most important step we can take to grow the economy and create jobs”, and The Royal Gazette messaged the minister for comment.
Tax reform and boosting government revenue are the most prominent features of the Budget — although Mr Richards conceded that “not all stakeholders” were in agreement over the general sales tax, for which consultation will commence “shortly”.
In the response period, the Opposition also raised concerns over the ministry retaining administrative oversight over betting shops.
Mr Burt pointed out that the Bahamas had been faulted last year over money-laundering issues with its betting shops, and questioned what measures were under way to protect Bermuda’s reputation.
Mr Richards agreed, calling it “a significant risk factor”.
At present, oversight of local betting shops is split between the ministry and Magistrates’ Court, but Mr Richards said it would be shifted to the Gaming Commission to be “supervised properly”.
An update also came on the Office of the Tax Commissioner, which the Opposition has faulted for falling behind on stamp duty and land tax.
Mr Richards said the office’s resources were being badly stretched by applications for exemptions on primary family homes.
Four more staff have been approved for the office, Parliament heard, and amendments to the Stamp Duty Act 1976 are to be brought before legislators in this session to reshuffle the administration of the primary family home programme — a move that Mr Richards said would not result in any less exemptions being granted.