In-Bond Merchants to Pay more Stamp Duty


On Tuesday (Feb.1), the House of Representatives approved a Resolution to increase the stamp duty payable by in-bond merchants from six to eight per cent as is provided for under the Provisional Collection of Tax Act.
Minister of Finance and Planning, Dr. Omar Davies, who moved the Resolution, explained that during the 2003/04 fiscal period, a decision was taken to increase the stamp duty payable by in-bond merchants from six per cent to 15 per cent. This, he informed, was with regard to certain goods and consumables defined under the Tourist Duty Free Shopping System Act, which were deposited in a licensed duty free shop for sale in the duty free trade.
However, Dr. Davies noted, “the announced increase resulted in a long period of representation and discussion between the In-bond Merchants Association and the Ministry. After consultation, we agreed that the increase would be eight per cent”.
Meanwhile, Dr. Davies informed that legislation was far advanced to expand duty free shopping to give arriving passengers the facility to purchase in-bond items.
He pointed out that one of the consequences of the 9/11 terrorist attacks on the United States was that there had been an increase in the restriction on baggage and the long wait at security check points and this had caused many travellers to opt for lighter baggage just to reduce the inconvenience. “This gives an added advantage for people to purchase on their actual return home,” he stated.
He explained that the items brought in duty free would be taken into account by customs and examined in relation to the duty free allowance for passengers. “We feel that to the extent that Jamaican travellers or tourists returning utilize the facility of purchasing duty free in Jamaica, this would improve foreign exchange savings,” Dr. Davies told the House.
Meanwhile, Opposition Spokesman on Industry and Tourism, Dr. Horace Chang, and Opposition Spokesman on Finance, Audley Shaw questioned the competitiveness of the “shopping experience” in Jamaica, arguing that there was a lot of room for expansion in that sector. Mr. Shaw said efforts should instead be focused on increasing the number of licensed operators, as this would ensure greater gross revenues for the industry on the whole.
Supporting the Resolution, Minister of Industry and Tourism, Aloun Ndombet Assamba stated that, “shopping is in fact a major activity that visitors to the island involve themselves in and we want to see this improved. We are looking at expanding the range of items that are offered for the shopping pleasure and we have seen an increase in confidence in the duty free sector”.
She pointed out that the investment of US$600 million by local duty free entrepreneurs spoke to the level of confidence in the sector. Presently, there are 50 licensed in-bond merchants operating in 120 facilities across the island.
Dr. Davies told his colleagues that, “before we speak about expanding, we have to ensure that there is adherence to the rules. In terms of broadening it, you are going to undermine the whole domestic distribution trade in that you would have to remove duty generally. This will work in terms of enhancing the revenue flows.”

JIS Social