Jamaican Charities Exempt from Some Customs Duties

Local charity organisations that carry out activities for the social well-being of Jamaicans can benefit from exemption from import duties and other statutory relief for particular items.

Speaking with JIS News, Director of Marine Wharves at Jamaica Customs Agency (JCA), Kevin Carter, explains that these entities are usually exempt from import duties, General Consumption Tax (GCT), and stamp duties, once they qualify.

Additionally, they only pay 50 per cent of customs administration fees.

However, in the case of motor vehicles to be used by charities, full import duties must be paid, as well as the environmental levy and the GCT.

Under the Charities Act, implemented in 2013, charities include organisations focused on alleviation of poverty and advancement of education, health, sports, the environment and social welfare.

Mr. Carter explains that in the past, a church could be seen as a charity and receive natural exemption. However, the Act requires that they be registered, in order to be recognised as such.

He notes that the Department of Cooperatives and Friendly Societies (DCFS) is the entity tasked with managing the application, approval and renewal of charities.

In outlining the steps to becoming a charitable organisation, Mr. Carter says the first stage is to be registered with the DCFS.

“You can’t just take in a box or a container of items and say we are just here to give this away; it has to come in the name of a locally registered charity,” he points out.

He says persons bringing in donations, who are not registered, can contact a local charity through which they can route the transaction.

He says the local charity will need to write and seek permission for the goods to come through its organisation and be distributed accordingly.

The second step is the receipt of a valid certificate of approval from the DCFS. The original document, along with the signatures of the charity’s signing officers will be uploaded to the JCA’s ASYCUDA system, which will then enable the officer at the port to view the certificate.

ASYCUDA is a web-based application that allows clients of the JCA, including customs brokers and shipping agents, to undertake e-transactions such as the submission of manifests, declarations, payments, and documents.

The third stage in the process is to ensure that all the imports are registered in the name of the charity, and that the address is consistent with that on the charity certificate.

“You can’t have the donation being in the name of one of the directors or any other names,” Mr. Carter points out.

He says the final step in the process is for the organisation to complete a Customs Declaration.

He explains that there are two declarations – IMS4, which is for shipments under US$5,000 and IM4 for shipments over that amount.

For the IMS4 declaration, there is no need for a broker. “You can come to the wharf, and the officer will create the IMS4,” Mr. Carter says.

He notes, however, that for shipments above US$5,000, “you will need a broker to create an IM4 document”.

He says that if the charity holder is unable to visit the wharf, a letter of authorisation stamped by a Justice of the Peace, along with the relevant copies of identification, may be sent with the person acting on the entity’s behalf for collection of shipments US$5,000 and under.

For shipments over US$5,000 that are being cleared by a broker, a C73 authorisation must be completed.

Additionally, he says that a signed special declaration on the letterhead of the organisation indicating that it is an authorised charity under the relevant sections of the GCT and Customs Acts, must be uploaded to the ASYCUDA system.

The declaration must affirm that the items will not be sold or otherwise disposed of without the approval of the Commissioner of Customs or the Commissioner of Taxes.

Mr. Carter says misuse or misrepresentation of this declaration document may result in goods being confiscated and or persons being arrested.

Other documents that need to be submitted for the clearance of the goods are bill of lading, or airway bill if it is coming in by aeroplane; packing list; and invoices.

The tax compliance certificate for the charity is also linked to the system, and will be accessed.

Mr. Carter explains that charity organisations are actually companies (non-profit organisations) and so, by law, need a tax compliance certificate.

Additionally, he says licences and permits will need to be uploaded to the ASYCUDA system where applicable, “for example, for pharmaceutical products”.

The Director advises that in cases where shipments arrive before the certificate of registration is issued, the goods must remain on the wharf until the certificate is ready. He says that the organisation could still be required to pay the duties, as it was not a charity when the goods arrived in the island.

He says that packing lists and invoices must match the shipment, so that the JCA can determine the value of the goods.

Additionally, he says that the powers and objectives of the charities must logically justify the items being imported.

This is a safeguard against persons who seek to use the Act to import commercial items.

“Some charities may say my powers and objectives are to help needy people in communities and to provide educational training, so based on that, the items being imported [must] fit their objectives,” Mr. Carter points out.

He notes, for example, that a bar table imported by a charity involved in educational training, is not consistent with the powers and objectives of the entity, and would not be an item to be considered for exemption under the Act.

Mr. Carter highlights that charity organisations may also be subjected to an audit by either the JCA or Tax Administration Jamaica (TAJ), and if it is seen that the entity is not operating according to the Act, penalties will be applied.

In the meantime, Mr. Carter wants to remind overseas charities that their international status does not extend to Jamaica, and, therefore, the benefits of being a charity will not apply automatically.

He advises that if such charities wish to import items into Jamaica, they will need to identify a local charity through which goods can be routed.

He also urges charities to keep up to date with their documentation, and to always make truthful declarations.

For further clarification, persons may contact the DCFS at 927-4912.