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LETTER OF THE DAY - Customs fees will drive manufacturers over cliff

Published:Friday | February 22, 2013 | 12:00 AM

THE EDITOR, Sir:

Successive governments seem to be in the business of giving today and taking back tomorrow. A forward step followed by a backward step results in net zero movement. More often than not, the backward steps exceeds the forward step, resulting in a net loss.

This has been the case over the years as Government makes small steps forward - mostly for political expediency - that cannot be sustained, resulting in a reversal down the road.

The new customs administration fee is a case in point. Previously, there was the customs user fee that was introduced and subsequently rolled back for manufacturers. The manufacturers were also encouraged to become an authorised economic operator (AEO) that would help expedite the clearance process at the ports. As of April 1, 2013, the clearance fee per container will move from approximately $3,500 to $45,000 (AEO fee $20,000 + container fee $25,000). This is in addition to the other existing fees.

I realise that the Government must raise revenue, but it should not be without vision. A fee of this magnitude will only serve to be inflationary, as the producer has no choice but to pass this additional charge on to the consumer.

The Government tells us that it wants to promote local production and exports and at the same time reduce imports. If Government is serious about this mandate, it needs to reduce the fee or make it exempt for importers of raw/packaging material.

Users of glass have no option but to import, as we no longer have a glass factory locally. We essentially have to import all our glass bottles and then export the finished product, which puts us at a clear disadvantage over other countries that produce their own packaging. We cannot afford additional charges at this time as it will only serve to make our products more expensive, thereby reducing demand. Wheel and come again, Minister.

ANDREW GRAY

grays.pepper@cwjamaica.com

Gray's Pepper Products