November 4, 2014

Dear Sir,

May I question the wisdom of having a duty free shop in the arrivals hall at the Frederick Wade International Airport?

Upon returning to Bermuda recently I noticed a duty free store located in the arrivals hall at the airport. On sale was duty free liquor, cigarettes and other items. I have never seen duty free offered whilst arriving in a country, but have frequently seen duty free stores when leaving a country.

The items for sale were far less expensive than on the Island itself. For example a litre of rum was around $12 and a carton of cigarettes approx $40. I compared the price to what it was in the retail stores and the difference was about half. Obviously the items for sale did not have Customs duties attached. This stirred me to investigate the duty on such items. I discovered that the duty on alcohol was normally $24.15 per litre. The duty on cigarettes is $0.18 a unit or $36 per carton. That is a tremendous saving for anyone that purchases cigs and liquor when returning.

However, this means that a lot of revenue for the government is being lost. The government’s revenue is declining due to the harsh economic times we are in. Surely we should be finding ways of increasing revenue to assist the current shortfall, and maybe one way is to not have duty free shopping available to incoming passengers.

If, for example, 100 cartons of cigarettes are sold daily in the duty free, that equates to $3,600 lost in government duty. Also, if 100 litres of alcohol are sold daily, that equates to $2,400.15 lost in duty. That is a total daily loss of $6,000.15 or $2,190,054.75 annually. That is a lot of money that the government can use right now. These estimates of the volume sold may be high or low, which would either indicate more money being lost or less. Whichever is the true amount, the amount of revenue not going into government’s coffers is substantial.

Perhaps a rethink on the wisdom of having duty free available for incoming passengers is forthcoming. One thing is for certain, the government can use the additional taxes at this time to help make ends meet.

DUTY FREE