Wed | Jul 18, 2018

Gov't wrongfully charges oil company over $880m, taxpayers foot refund bill

Published:Monday | April 25, 2016 | 9:24 AM

 Jovan Johnson, Gleaner Writer

By the end of this fiscal year, Jamaican taxpayers would have repaid some $881 million to global oil company Chevron which the Government wrongful charged in customs duties over a 10-year period.

Jamaica started to refund Chevron, after a local court ruled in 2013 that the charges were unconstitutional. 

The 2016-2017 Estimates of Expenditure shows that the government has set aside $269.4 million to cover this year's payment to the company, which trades in Jamaica as Chevron Caribbean SRL. 

That amount is in addition to the $611.5 million that has been paid in the past two fiscal years. 

It's not clear how much money is left to be paid to Chevron.

The money was collected in customs duties over a decade ending in 2013 when Puisne Judge, David Batts, ruled that the imposition of the fee was unconstitutional.

In 2003, then finance minister, Dr Omar Davies, purporting to act under section 257 of the Customs Act, amended the Customs Regulations to introduce a user fee of two per cent of the value of goods.

The fee was imposed on all goods imported to Jamaica, including petroleum brought in by Chevron.

In April 2009, then Finance Minister Finance Audley Shaw increased the fee on imported finished petroleum products, but excluded imports under the Petro Caribe Agreement.

However, Justice Batts held that the fee was not lawfully imposed in the first place because it was not approved by the Parliament.