Duty Free Shopping In Arrivals Lounge
Premier and Finance Minister Paula Cox yesterday [Nov.25] tabled legislation in Parliament that would see the introduction of duty free shopping for passengers arriving at Bermuda’s L.F. Wade International Airport.
The Premier said such a move would stimulate the island’s ailing retail sector while also creating new sources of revenue for Government.
” I am persuaded that should arrivals duty free sales be approved by this Honourable House, Bermuda will stand to realise significant economic and other benefits,” she said. “The experiences of other countries that allow arrivals duty free have certainly been positive, and Bermuda may expect to reap similar benefits.
“Furthermore, experience internationally would seem to suggest that Arrivals Duty Free has no appreciable impact on local retail sales. Rather, it has been found that duty free revenues have come mainly at the expense of duty free shops in foreign airports.”
The Premier said the current lack of duty free goods available to passengers arriving in Bermuda meant money that could be spent on the island was instead going abroad.
“This translates into a competitive disadvantage for the Bermuda Airport and a reduction in the potential revenues that might be raised from arriving passengers,” she said. “By repatriating sales currently being transacted in airports abroad, such as JFK or Gatwick, Government will be able to collect revenue that is currently being spent overseas.
“The introduction of arrivals duty free sales will immediately enhance the non-aeronautical revenues of the Bermuda Airport through the leasing of the necessary commercial space at the airport. It is also expected that arrivals duty free sales will result in new sales and airport jobs at a time when the Government seeks to stimulate the Bermuda economy, including its struggling retail sector.”
The Premier’s Statement Appears In Full Below
Mr. Speaker,
Honourable Members are requested now to give consideration to the Bill entitled the “Bermuda Airport (Duty Free Sales) Amendment Act 2011”.
The purpose of the Bill is to make provision for the duty free sale of goods to arriving air passengers at the L. F. Wade International Airport by amending the Bermuda Airport (Duty Free Sales) Act 1997, which I will refer to as the principal Act.
Mr. Speaker, since 1997 airline passengers leaving the Island have enjoyed the facility of being able to purchase goods at airport duty free shops. Such goods are sold duty free provided they are immediately exported from Bermuda by the purchaser. Under the proposed arrivals duty free sales scheme, both returning residents and our visitors will also be able to buy goods in an arrivals duty free shop after they pass through Immigration but before arriving at Customs controls.
Honourable members may be aware that currently, more than 50 countries around the world have arrivals duty free shops including the United Kingdom. A number of other countries are actively considering implementing arrivals duty free. Indeed, only this summer, Switzerland’s first arrivals duty free shops opened their doors following changes to Swiss legislation allowing the purchase of duty free goods upon arrival at the country’s international airports.
Mr. Speaker, goods purchased by an arriving passenger from an arrivals duty free shop will be treated as though they were imported goods. Accordingly, passengers will be obliged to declare their purchases on their Customs Traveller Declaration (CTD) alongside any other goods they may have acquired abroad. All arrivals duty free purchases will be subject to the existing duty free allowances as if those purchases had been imported by the purchaser in their accompanied baggage. Passengers will be asked to pay the duty due on any imported goods or purchases from arrivals duty free shop in excess of their statutory allowances. To assist Customs in monitoring arrivals duty free sales, all purchases will be distributed in clearly marked and sealed packages.
Mr. Speaker, the range of goods available for purchase in an arrivals duty free shop will be similar to the range of goods currently sold in duty free shops in both the U.S. Preclearance and International departures areas. The law currently limits goods that can be sold duty free in regulated shops to cigarettes, cigars, snuff, spirits, tobacco, wines, and tobacco products.
Honourable members will be aware that each arriving passenger is currently entitled to import duty free-
- 1 litre of wine
- 1 litre of spirits
- 200 cigarettes
- 50 cigars
- ½ kg. tobacco
Mr. Speaker, I should mention that while it is currently lawful to sell both duty paid and duty free goods from a departures duty free shop, only duty free goods will be allowed to be sold from an arrivals duty free shop. This condition is necessary so arriving passengers must declare, and (subject to any duty free allowances) pay duty on all the goods carried with them wherever purchased. If arriving passengers were able to purchase duty paid goods, it would be necessary for separate declarations to be made in respect of duty paid and duty unpaid goods; and, in any event the officers would have substantial difficulty in determining whether the correct duty had been paid.
Mr. Speaker I am persuaded that should arrivals duty free sales be approved by this Honourable House, Bermuda will stand to realise significant economic and other benefits. The experiences of other countries that allow arrivals duty free have certainly been positive, and Bermuda may expect to reap similar benefits. Furthermore, experience internationally would seem to suggest that Arrivals Duty Free has no appreciable impact on local retail sales. Rather, it has been found that duty free revenues have come mainly at the expense of duty free shops in foreign airports.
Mr. Speaker, as I have already indicated Bermuda law currently allows the sale of duty-free goods to passengers departing Bermuda, but does not contemplate the sale of duty free goods to passengers arriving in Bermuda. As a result, sales that could be made locally are currently being forced abroad. This translates into a competitive disadvantage for the Bermuda Airport and a reduction in the potential revenues that might be raised from arriving passengers.
Mr. Speaker, by repatriating sales currently being transacted in airports abroad, such as JFK or Gatwick, Government will be able to collect revenue that is currently being spent overseas. The introduction of arrivals duty free sales will immediately enhance the non-aeronautical revenues of the Bermuda Airport through the leasing of the necessary commercial space at the airport. It is also expected that arrivals duty free sales will result in new sales and airport jobs at a time when the Government seeks to stimulate the Bermuda economy, including its struggling retail sector.
Mr. Speaker, allowing arrivals duty free sales will also increase passenger convenience by eliminating the need for passengers to hand carry their carton of cigarettes, bottle of rum or wine on board an aircraft. Instead they will be able to purchase these items on arrival in Bermuda. This will have a positive knock-on effect of keeping CO2 emissions down by reducing baggage loads for aircraft.
Mr. Speaker, also to be considered are the increased security measures globally, which restrict the amount and packaging of liquids, aerosols and gels (LAG) allowed on flights. At present, international travellers transiting through other airports en route to Bermuda run the risk of having their duty free wines and spirits purchases confiscated by security personnel. Given that Bermuda is not a transit point for airlines, that risk will be all but eliminated by purchasing duty free wines and spirits on arrival.
Honourable members will be aware that passenger flow is a perennial issue at the airport. Passengers tend to arrive in the Customs baggage hall in waves as each flight arrives. It is hoped that arrivals duty free sales will help mitigate pressure on customs staff caused by these pulses by removing at least a portion of the arriving passengers from the initial rush on Customs controls.
Honourable Members will have noted that the Bill provides mainly for amendments to the provisions of the principal Act governing the operation of Airport Duty Free Warehouses and not the provisions governing Regulated Shops. For the sake of clarity, I should explain that whereas the provisions of the principal Act that relate to regulated shops are suitable, and have been used to regulate departures duty free shops; those provisions are not suitable for regulating arrivals duty free shops. The special risks, charging provisions, and liabilities involved in arrivals duty free shops require a different legislative vehicle.
Mr. Speaker, the Airport Duty Free Warehouse provisions of the principal Act have been found to contain, with the necessary modifications, sufficient measures to regulate arrivals duty free shops. This “new purpose” of the Airport Duty Free Warehouse is to become the sole purpose. There is no need to retain separate provision for a storage warehouse servicing departures duty free shops.
With those comments, Mr. Speaker, I now read, for the second time, the Bill entitled the “Bermuda Airport (Duty Free Sales) Amendment Act 2011”. Mr. Speaker, it is anticipated that the Bill will become quite clear to Members when we are in Committee.
Thank you Mr. Speaker.
“Mr. Speaker, goods purchased by an arriving passenger from an arrivals duty free shop will be treated as though they were imported goods. Accordingly, passengers will be obliged to declare their purchases on their Customs Traveller Declaration (CTD) alongside any other goods they may have acquired abroad. ”
So they will pay duty on duty free items..35%.??//Would hope to see if you have found any companies that will actually rent the space before you go and build shops that will go unused…..duty free arrival shops i have seen come directly after customs, are actually duty free and a always empty because people are glad to have arrived at their destination and want to get out of the airport ASAP….So in my opinion this will be a big fail….but I guess we will see…..
Dumbest thing I ever heard. Items in this store might be “duty-free” but they will still be “Bermuda-priced.” Still cheaper to buy in the States…
I guess this is one way to distract arriving passengers from the long waits at immigration and them baggage collection/customs – divert them with a little shopping for a bottle of rum.
Duty free? But I still have to pay the 35% duty on it…. Another useless idea!!
There isn’t enough space in arrivals now… So which “friend” will get the contract to enlarge arrivals?
This further illustrates the clear lack of intellectually sound ideas the PLP bring forward to the table… This will only benefit a VERY select few The Goslings family etc. This honesgtly has to be one of the stupidest ideas I have heard of.
Bravo Paula and Company, Bravo! Everything is going to be okay now!
-Noel
I wonder who bought those 20,000 cases of Havana rum that customs auctioned off last week. Maybe they need somewhere to sell it.
Was that Havana rum that Wayne Perinchief was involved in ?
“This will have a positive knock-on effect of keeping CO2 emissions down by reducing baggage loads for aircraft.”
wow, just wow. anything to justify another failure.
Mr.Speaker wait until you hear this idea….seriously..can you make this stuff up….How about a sign outside that says Duty Free + 35% tax….that way the dumb tourist don’t realize they are paying duty because we can call it tax….
Reduce CO 2 emissions by not bringing in a half dozen bottles of scotch! What a strech!
Come on give the little lady a break. She only thought of this idea the night before so they haven’t had much time to try to justify it.
Seriously, are you for real?
Who in their right mind would add more time shopping and then finding time & location to calculate/recalculate your payable duty at a princely 35% to “duty free” products to an already annoying & frustrating system already in place.
God help you if you arrive simultaneously with one or two other flights……be prepared for an extended time staring at a dull immigration hall to await your confrontation with immigration and customs officials only to find NO taxis outside the arrivals building.
Speaking from personal experiences I cannot wait to get out of the place, not trying find time to hang around.
How about doing a survey of returning residents to see what kind of response you get?.
Feel The Love !!!
The goods will be “Duty Free’ only for the 45 minutes it takes for you to queue up and pay the 35% of – er – duty. At that point the goods will be just like anything else. Only you have to get in line to pay the duty separately.
What is the point of this again…?
I personally would buy from the duty free shop on my way home. As long as you stay within your limits it is duty free.
If I could buty a bottle of good rum or scotch duty free ..I will. You only pay duty if you want more.
Reduce C02 what rubbish. How will these items get to Bermuda in the first place – carrier pigeon? PLP grasping at straws – pathetic as usual. What a bunch of losers.
Significant benefits? Please provide the details. How much revenue will this generate? How many jobs will be created and for what purpose since payroll tax is waived for retail?
Will save on CO2? Might make some sense if compared to the total weght of each passenger and their luggage was considered. Why should I, being normal weight, be restricted to the same luggage weight as another passenger 2 or 3 times my weight? CO2 could be saved by restricting passengers to a maximum weight limit – above that you go by boat.
Reads like another of the “woke up this morning and thought of this” idea.
None of the reasons makes sense so it has to be another way to reward someone.
“None of the reasons makes sense so it has to be another way to reward someone”.
You hit the nail on the head. Let’s see who gets the work remodeling the airport. (Any guesses? I think we already know the shortlist don’t we?)
And let’s see who ends up with the concession to run the shop.
I bet they already know.
I haven’t been a big fan of the PLP lately …but I am a huge believer in Paula Cox. I wish they had kicked out DB and given here an opportunity years ago. I truly believe we would be ina better place right now.
WOW, I guess Mr. Cox wants to open a Duty Free store now.
Lol.. Reduce co2? lol.. This place is finished, i hope everybody has their lifeboats ready. On the other hand, this is the funniest crap ive heard all day. I cant wait to see the look on poor tourist faces when they realise they have to pay duty on duty free items! wth is wrong with these people?
This Island has been run duty free everysince Ol Sir John took leave . Most elected people since Sir John’s Posse have abdicated thier responsibilities and operated free of duties while cashin fat checks in return . Dreb was by far the worse .
You know what, screw it! Since this government has clearly divided its people by race, this needs to be said. Show me one country thats run by ” a person of color ” thats run correctly without corruption to its own people? The sad truth is that ” a person of color ” will vote the corruption of themselves back into power because they would rather get screwed by their own.. ie. ” a person of color ” Then let a capable, trustworthy ” what we can do for the people ” ie. a white person into power.. its the sad truth.
The worst part is people vote the corruption back into power because they would do the same if elected.. ” black power ” right? The damage is done.. This country has been raped of its future, by ” their own. people ” and watched and praised it while it was happening..
congratulations PLP government… you took a BERMUDIAN who happens to be white.. who also was brought up with the belief that we are all one, black or white, a person who never saw color and have had many ” a person of color ” friends.. and made me sound like a racist prick.. even though i tell my black friends what im telling you and they agree with me.. But thats what yu wanted, you racist pricks, so congratulations
Would it be safe to say that you And your family benefitted tremendously under Sir John . Or was Sir John just a figure head ? Please explain .
I used to think my comprehension skills were good. However I’ve read this 3 times now, and I’m struggling to understand how this makes sense??
Most of the complainers above have obviously not read Premier Cox’s statement or simply just cannot understand what she is saying… or are just plain ole’ “haters”. That is clear from reading their comments and comparing them to what she actually outlines. Her proposals make good sense and while may only be a small policy shift, it is something that cannot ultimately hurt us but only can help by giving greater and cheaper retail options locally that can be owned by a Bermudian and employ Bermudians both upstream and downstream of the duty free retail operations.
The proposal is clearly to try and make money, but when Bermuda already has medical issues requiring costly treatments, why is the Government promoting and encouraging booze and smoking? These can and will ultimately hurt us. Logically it will also take some sales away from hotels, bars and retail as visitors and locals will be encouraged to buy at the airport. All it is really doing is moving sales from one location to another, so very little benefit.
Get real buddie.This is a farcical idea.The plain truth is that I get my duty free items at my departure location when I have time to spare and it is convenient.From large stores that are well stocked with friendly sales staff.The prices there are truly cheaper.
When I hit the ground at LF Wade I just want out.I don’t want to be delayed any longer than passible.I would never use that store!There is no business plan for this stupid idea that will actually show a profit.
I see. Any critique must be from a “hater”. I see.
‘Hater’, the most played out, annoying buzzword of the 21st century.
David, sorry to disagree but this proposal makes no sense whatsoever. Locals aren’t likely to hang around to purchase anything and tourists will already have purchased their duty free allowance before they got on the plane.
If Bermudian’s do not stop when going through then so be it. If foreign passengers do not stop when going through then so be it. The market conditions then will dictate a closure of the outlet. The point is, for me, it is better to do things to stimulate local exchange than to stand on one’s laurels and do nothing. I, for one, welcome the innovation and out of the box thinking. It’s called responsive and proactive government.
Looks like putting more money in the pockets of the G & G families. If this had been suggested by the old UBP, pre-1998, the likes of Mr. D. Chapman would have been loudly protesting about nepotism, amazing how things have changed.. Notice how the Hon. Mayor of Hamilton is not a critic of the PLP Cox Administration…just saying…?
No man can presuppose the thoughts of another, especially based on past imaginary “if’s”.
Secondly, are the Gibbons and Gosling’s family the only Bermudians that are involved in commercial retail locally. Although, it is obvious their products would be on sale there, theirs is not a mutually inclusive club. Maybe there is some contractual obligation as to the retail outlet that will be in operation that you are privy to and that others are not? If so, and the two families do make increased sales, they employ many Bermudians and this employment is important.
Yes, It is “amazing how things have changed” – the oligarchy that ruled the Corporation of Hamilton is not what it once was in Bermuda and the disenfranchisement and inequities visited on many Bermudians based on their color, class or creed has significantly changed for the better today. Read here for a good refresher so we can all give thanks for the positive changes in the society that we call Bermuda today: http://www.bermudabiographies.bm/Bios/bio-HenryTucker.html
No, this is idiotic. While it won’t do any harm, it’s picking away at the edges, much like the poorly thought out rise in duty at the airport. This isn’t proactive & responsive government (not sure you can be both, one or the other?), it’s the action of a government devoid of intellect and out of ideas.
The economy is fundamentally screwed, largely due to the actions of these a$$holes, and it needs seismic change to get it on track. This sort of ineffectual meddling isn’t the answer.
It’s the political equivalent of praying. Looking like you are doing something, but actually doing nothing of any value.
Putting aside the health issues I raised above, if helping retail and raising revenue is the real goal let shops/supermarkets sell alcohol on Sundays. Simple and achieves both goals.
Well said.
Good idea, but how would they turn that into a favor? There’s no contract to award, and no concession to award. Therefore they see that as pointless.
Is this all our Hon. Premier & Finance Minister has to offer… cheap, duty free cigarettes, tobacco, cigars and alcohol to returning local residents (not Tourists – so no foreign exchange is generated), so our already unhealthy population can, “Party on with all their cheap booze & tobacco” and become an even greater burden to our already expensive, broken Health Care System while enriching the owners of the local liquor & tobacco importers? God help us. Please Bermuda see the light, it is time for a change, those in charge at the moment are grasping at straws and don’t seem to have a clue.
I heard that if you look in one of her ears, you can see daylight out the other side.
I just read this again..
“This will have a positive knock-on effect of keeping CO2 emissions down by reducing baggage loads for aircraft.”
..did she really say that?
They were supposed to discuss the 35% thing, but I don’t see anything about it. Did it pass???
On one hand Cox is doing things to ‘stimulate local retail’, and on the other hand she’s setting up a duty free shop in direct competition to local retail.
How many personalities does she have?