JIS News

Minister of Finance and the Public Service, Hon. Audley Shaw, announced an increase in the tax on certain alcoholic beverages in the House of Representatives Tuesday (November 30).
Mr. Shaw stated that a single specific Special Consumption Tax (SCT), based on the alcohol content at the rate of $960 per litre of pure alcohol, will be applied.
This increase will apply to alcoholic beverages such as vodka, beers, stouts, wine, tonic wine, liqueurs, whisky, gin, brandy and Overproof rum (excepting White Overproof Rum).
“A special regime will be put in place to maintain the existing SCT rate of US$0.04 per litre in wines, cordials and liqueurs imported directly, or taken out of bond by only hotels/ resorts cottages registered with the tourist board, processed through the tourist board and using procedures set by the Commissioner of Customs,” he explained.
He also informed that White Overproof rum will attract a specific SCT rate of $450 per litre of pure alcohol which is the equivalent of the current 30 per cent ad valorem SCT.
“In other words there will be no increase for White Overproof rum,” he noted.
The Minister said the measure is expected to yield $618 million. The effective date for implementation is Wednesday (December 1).
Also the current multiplicity of Additional Stamp Duty on brandy, whiskey, gin and vodka will be changed to a single ad valorem rate of 35 per cent. This measure is expected to yield $54 million effective December 1, as well.
Mr. Shaw also stated that, in order to “plug” the hole created by the different tax treatments in tobacco related products, a “uniformed tax treatment” will be applied.
“Cigars, cheroots and cigarillos of tobacco and tobacco substitutes will now attract the same tax treatment as cigarettes. This measure is expected to yield $100 million. The effective date for implementation is December 1, 2010,” he said.
In the 2008/09 budget, the tax structure on tobacco related products was reformed eliminating some of the ad valorem tax types, and have them incorporated within one rate of Special Consumption Tax.
The 2008/09 reform resulted in the elimination of the Additional Stamp Duty and ad valorem SCT on cigarettes; increase in the specific tax from $2,300 to $6,000 per 1,000 sticks, and remit of 20 per cent of the tax revenue to the National Health Fund; and the elimination of the excise duty, because the tax revenues had been shifted into the specific tax.
“This reform only applied to cigarettes containing tobacco and cigarettes containing tobacco substitutes. Cigars, cigarillos and cheroots were not affected by that reform, and this created a loophole in the law, as cigarettes could be imported under the guise of inter alia cigars, cigarillos and cheroots,” Mr. Shaw said.