Customs duties in Jamaicaamong world’s highest

It signals that customs duties are higher in Jamaica than Nigeria but just lower than India.

“Customs duties in Jamaica are among the highest in the world, imposing a levy of 1.61 per cent of its gross domestic product (GDP). We need to conduct a review of this regime to assess the appropriateness of this policy in the current global market place,” stated Dawkins Brown, managing partner of UHY Dawgen in Jamaica in the report entitled UHY Study on Customs Duties.

Established in 1986, UHY is a network of independent audit, accounting, tax and consulting firms with offices in more than 296 major business centres acrossmore than 89 countries.

UHY studied customs duties levied by 18 economies around the world as a percentage of each economy’s size as a simple indicator of the impact of a country’s trade barriers. It found that emerging economies charge import taxes equating to an average of 0.82 per cent of their GDP, compared to a global average of 0.48 per cent. The country with the highest customs duties was India at 1.78 per cent, followed by Jamaica at 1.61 per cent and Nigeria at 0.96 per cent, according to the study’s table.

By contrast, the major European Union economies surveyed raised proportionally the least in customs duties, at just 0.13 per cent of their GDP on average – lessthan one-sixth as much as emerging economies.

Also countries which are part of the North American Free Trade Agreement (NAFTA): the US, Canada and Mexico, levy, on average, a sum equivalent to 0.2 per cent of their GDP in customs revenues.

UHY says that protectionist policies implemented by emerging economies to safeguard the interests of their domestic producers risk continuing to adversely impact consumers in those countries by creating artificially high prices for imported goods. It adds that this may also suppress the competitiveness of domestic manufacturers and producers by insulating them from global markets.

“Consumers in emerging economies may still be getting a raw deal, as their national governments continue to strike a highly protectionist stance in an attempt to boost their domestic agricultural and manufacturing sectors,” stated Ladislav Hornan, chairman of UHY in comments accompanying the study. “By creating distortions in the market, the unintended consequence is often that consumers are left facing higher prices, while the duties fail to stimulate uncompetitive domestic industries. They often simply amount to another tax on businesses and consumers that leaves less money available for spending and investment locally.”

Hornan added that excessive trade barriers prevent countries from focusing on industry sectors where they do have a comparative advantage, and risks stifling innovation and efficiency.

“Creating more Free Trade Agreements (FTAs) or customs unions with a more diverse range of countries is becoming increasingly important to increase competitiveness. Many are benefiting from spreading their net far wider than purely their immediate geographical neighbours,” added Hornan.

In July, the Shipping Association of Jamaica (SAJ), which lobbies to improve the competitiveness of the port on behalf of its workers, described the proposed amendments to the Jamaica Customs Act as anti-trade and backward. The SAJ statement came in “support” of comments made a week earlier by Pat Francis, chairman of Jamaica’s Trade Facilitation Task Force, a body that liaises with Government and the World Trade Organization (WTO).

Francis also argued that the current amendment to the Customs Act failed to adequately address trade facilitation but rather focused on fines.

Earlier this year eight ministries signalled a commitment to further enhance the trade environment in Jamaica with the signing of a Memorandum of Understanding with the Trade Facilitation Task Force. Francis outlined that the next step involves creating a working team.


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