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‘Sin taxes’ set to rise on Monday

The new ten percent import duty hike on cigarettes and alcoholic beverages goes into effect on Monday, April 1, as a result of the Customs Tariff Amendment Act 2013.

The tax hike was implemented as a result of the new Budget in February to raise an estimated $2 million in revenue.

As of Monday, cigarettes will go up from $40 to $44 per carton. For alcoholic beverages, beer will go from $0.90 per litre to $0.99 per litre, wines will go up from $2.63 to $2.89 per litre.

Rum, vodka, gin, whiskies and liqueurs will go up from $25.15 per litre to $26.57, and passengers arriving at the LF Wade International Airport will have a fixed duty rate on spirits of $10.63 per litre.

A Customs spokesperson said: “The flat rate for spirits imported in passengers’ baggage makes it easier for arriving travellers to declare and pay duty on liquor. Our airport staff will not have to know the alcohol content of your rum or whisky to collect the right duty.”

Meanwhile, another Government spokesperson said further provisions of the 2013 Amendment Act will “make improvements to the structure of the Customs Tariff Act 1970”.

“The current complex duty charging provisions are to be made simpler by replacing the 25 percent ‘standard rate’ and associated business end-use relief with a streamlined charging provision which simply imposes duty at the rate specified in the Customs Tariff on all imported goods — whether intended for personal use or for a business purpose,” the spokesperson said.

“This year’s amendments to the Customs Tariff Act 1970 also include measures designed to encourage certain types of business for the development of Bermuda by expanding the scope of the surcharge on duty suspended goods using the mechanism of a business temporary importation duty relief.

“The scope of the surcharge provisions is to be expanded to include not just bonded warehousing under the Revenue Act 1898; but also other duty suspension arrangements, such as — storage in a regulated shop under the Bermuda Airport (Duty Free Sales) Act 1997; storage in bond under the Bonding of Precious Stones Act 1952; and the new business temporary importation relief .”

There are two surcharge rates for goods removed from the bond that will be rationalised to a median rate of 3.75 percent. Items listed for business temporary importation relief the surcharge will be calculated based on their “deemed customs value” as set out in the Customs Tariff Act 1970. And in both cases, it will be payable in addition to any duty due upon the discharge of duty suspensions.

“The new business temporary importation relief is designed to encourage sustainable development by real economic growth. It allows the duty free importation of goods for business use, including use of goods as inventory, subject to the payment of duty and the surcharge on diversion to home use or export.

“For traditional business it facilitates greater inventory and larger scope of goods and services. For new business it allows for entry to market with reduced initial investment cost.

But the new business temporary importation relief will not come into effect right away. “It will be activated by the Minister’s Order in due course to allow Customs and commercial importers the time to make the necessary programming adjustments to their respective automated systems,” a Government spokesperson said.

For more information e-mail customs@gov.bm.

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Published April 01, 2013 at 9:00 am (Updated April 01, 2013 at 12:53 am)

‘Sin taxes’ set to rise on Monday

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