DACOSTA
FINANCE & Planning Minister, Dr. Omar Davies, needs to terminate the customs user fee (CUF), says Jamaica Chamber of Commerce president Noel daCosta.
The 2 per cent CUF on all imports was introduced to replace a 4 per cent cess imports proposed in the 2003/2004 national budget. The CUF was intended to last initially for one year with a possible extension, at a reduced rate, for no more than two years in total and was aimed at netting approximately $3.4 billion to cover a budget shortfall.
"We are now nearing the end of the third year; the CUF is still in place, and still at the rate of 2 per cent," he said. This is because advance taxation has damaging effects on business and commerce, particularly in manufacturing and tourism.
As the fee is levied on all imports, products made using imported raw materials and capital goods have their export prices increased by this input factor tax. In a country already characterised by high costs, he said this places exporters at an added disadvantage.
CALLING ON MINISTRY
The fee was implemented to close a $3.4 billion gap, and has thus far brought in almost four times that amount. In the first year alone, it raised $3.465 billion.
"The Jamaica Chamber of Commerce is calling on the Ministry of Finance & Planning to terminate the CUF at the end of the current fiscal year at the end of this month, as it has more than served its purpose," Mr. daCosta said. "This issue is still under review by the Ministry of Finance."
