Court: Mailboxes Entitled To Business End-Relief

August 23, 2012

The Chief Justice has ruled that Mailboxes Unlimited Ltd is a “business” for the purposes of CPC4000. On 1 April 2012, the import duty on all items imported into Bermuda for personal use was fixed at a flat rate of 25%.

However, the legislative changes also introduced tax relief for “business end-use” importers which entitles businesses to pay the tax rates as specified under the First Schedule of the Customs Tariff Act 1970. This relief is referred to as CPC4000.

Mailboxes launched proceedings at the end of June this year seeking, amongst other things, a declaration that it qualifies as a ‘business’ for the purposes of CPC4000, something which the Collector of Customs had argued was not the case.

Steve Thomson, owner of Mailboxes, reacting to the news of the Court’s judgment said, “I am very pleased with the outcome of the case. I feel it vindicates what my position has been all along, that Mailboxes Unlimited qualifies for “business end-use” relief.

“Our driving motivation has always been to serve our customers to the best of our ability and keep our costs as low as possible. This decision will help our business and our customers in that process.”

Mr Thomson concluded, “I look forward to meeting with the Collector in the corning days to determine how we best proceed in light of the Court’s ruling.”

In response to the Mailbox Court Ruling, Premier Paula Cox said:  “The Court today released its judgment on a case involving Mailboxes Unlimited Ltd. (Mailboxes) -v- Collector of Customs which sought three declarations against Government, inter alia, as to whether or not Mailboxes were entitled to the business end-relief provided by the Customs Procedure Code 4000 (CPC 4000) contained in the Tariff Act 1970.

“The relief was available to all importers who operated a business of importation for profit. The intent of the law was to maintain the same rate of tax for businesses and to have a different rate for private use. It was difficult to separate the two when one Courier imports goods for both business and private use.

“The Court recognized the difficulty and held that Mailboxes carried on a business of importation of goods irrespective of whether or not the goods were consigned for business or private use and that they were entitled to the lower rate of tax. The Court ruled in favour of the Crown in refusing the other two declarations sought,” continued the Premier.

“The main policy objective for the amendment was to assist the retail sector through duty relief and to provide an incentive to on-Island shopping. Revenue impact should not be material. This was never designed to be a major revenue raiser, even though any additional revenue is welcome.

“The Ministry will now carefully review the judgment and make any necessary changes in line with the judgment,” concluded the Premier.

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  1. Courier Firms Notify Customers Of Rate Changes | Bernews.com | August 24, 2012
  1. This duty hike plan should be scrapped. It had little hope of accomplishing it’s goal and only serves to add more complexity and bureaucracy. The result now will be that the post office suffers.

    The duty system needs to be simplified, not made more complex.

  2. tsol says:

    Well that’s great now only if they could get my package to me thats been on the island since the 8th.

    • (0.0) says:

      I feel you there! I ordered before Cup Match. Mines has been on island as well. But they dont know when it will be released. Not impressed.

      • Joonya says:

        We have mines on the island??? Well I hope they dont release them, that could be dangerous..

        • Come Correct says:

          Yea its part of the feral chicken erradication. We’re gonna put them all over spital pond and see what happens. No they won’t be clearly marked that takes the fun out of it.

  3. Maria Jacobs says:

    Ha ha ha ha ha ha ha ha ha!!!!

  4. Extraordinary says:

    I wish they wouldn’t call it an incentive, that makes me feel like there should be some reward. Trust me this is not an incentive. It is a stimulating action because now we have to say to ourselves ‘well it will cost the same now if I bring it in myself’. Good for business bad for Bermudians. HA so on the flipside bermudians are so strapped for cash they buy nothing!

  5. tsol says:

    Hey Maria Jacobs, I don’t know what your laughing about, in truth it’s not Mailboxes holding up the packages it’s Customs doing it because of the court case. It is nothing more then pettiness and corruption, and an attempt to destroy a business that has stod up to the government.

    • Family Man says:

      Customs are doing it to DHL as well. Holding up goods just because they can. Petty little thugs hiding behind a uniform.

    • Know your facts says:

      @tsol.
      Actually know your facts and don’t spread propaganda. When a courier opens mail can and scans it they put that it’s sent for customs inspection. Customs does not hold anyone’s package for no reason , they are there to inspect and clear paperwork that is presented to them by the agent(courier).if they don’t present the paperwork in a correct manner or if they can’t reach a customer for a proper invoice ,the item just sits in their warehouse. Add to that if the courier is having problems or is backed up by several days(as the courier used by mailboxes is) items don’t get cleared on a timely manner. When customers call them it’s alot easier to tell them that customs is holding those items instead of the truth which is we are slow and can’t get work processed properly,because of they did they would lose tons of business. A coincidence that that courier company is the only one having issues while other three companies get all thier work processed and out the door daily? I think not

      • Just ME says:

        I had a package get on the island before Cupmatch too and took forever to recieve it. I was told the delays were due to HMS Customs using a new system of some sort and they had back logs of items that needed to cleared and were sending packages out to the couriers on a piecemeal basis. So while I’ll admit its a bit frustrating,
        I don’t there is any skulduggery going on.

      • Mad Dawg says:

        You’re talking rubbish. It’s Customs doing it as a vendetta. The court should award damages paid by any government agency that treats a business illegally, as it is doing here.

        • Get ya fact right says:

          No it is not custome,mailboxes had issues with fed ex and moved to dhl who had issues clearing their regular work and decided to take on this huge task of clearing mailboxes work as well,I know people there and at one point they were weeks behind and just kept blaming customs to their clients. If it was customs and not poor un organized courier than why did they hire a whole bunch of new workers to input data to keep up with customs?even their own bosses and Steve Thompson know where the real problem is ,but blaming dhl wouldn’t of got duty rate reduced. So well played sir but don,t blame customs

          • Mad Dawg says:

            Well I’m sure that Customs will be happy to return all the illegal overpaid duty it has collected on everything since it started collecting 25% on everything. Right? As it was illegal. Right?

    • Actually I don’t think it’s pettiness and corruption. From what I’ve heard, the amount of paperwork involved due to the added bureaucracy has gone through the roof so it’s much harder to get things processed.

      I think where it used to require one form per shipment it now has changed to one form per item

  6. Guy Carri says:

    Honestly, please let me know if I’m understanding this correctly. If not, please help me to understand.

    If you ship something directly to your house you’d pay consumers’ duty rate.

    If you bring something in through mailboxes, you’d get business duty rate.

    If that’s how it works, there sure is a flaw for the whole reasoning of why gov hiked up the rates.

    • Know your facts says:

      If a ruling is made for one company will have to be the same across the board

    • My understanding of the ruling is that

      - if you ship via the post office you’ll be charged 25% duty
      - if you ship via anything else you’ll get regular rates.

  7. VJ says:

    Customs isn’t holding up people’s packages. When the system change came into place, the courier’s computer systems needed to be calibrated to accept the new rates. Also, it is my understanding that the couriers have to input a declaration for every single importer and not use a blanket declaration like that did before. This is time consuming, hence the packages are held up. Its easier to Mailboxes and DHL to just blame Customs. My niece gave me the whole run down, and when Mailboxes gave me the “Its being held up by Customs” I challenged that statement. The girl started stuttering and stammering and my package miraculously “cleared Customs” that same day. ZipX doesn’t have this problem and I am switching. Mailboxes is overpriced and isn’t even a true express service. They use Fedex which is the express service, not Mailboxes…

    • Know your facts says:

      Why items are taking longer,they use to use fed ex which helped with getting things done in hours,but they have started using different courier company because it was cheaper and it back fired. Now items take forever to clear and they just keep saying customs is holding up thier package.

    • trix says:

      agreed and also note that the consumer isn’t getting much of a “deal” because Mailboxes adds ridiculous fees and it will end up costing you an arm and a leg (happened to me and I won’t be going back). So nothing at all to do with the 25% duty. They charge you not according to the weight of the package but the actually dimensions. What cost me $19.00 on-line ended up costing me $60.00! Beware consumers…..

      • Mad Dawg says:

        In that case Customs will have no problem returning the over-collections, since it illegally started collecting 25% on everything.

  8. Triangle Drifter says:

    So…how much will this latest PLP ill thought through scheme to extract money out of the taxpayer going to cost us?

    Mailboxes is entitled to legal costs incurred.

    14 years of PLP experiment & we still have a bunch of amateurs who have no clue of how to run a Government.

    Had enough yet?

    • Dennis Williams says:

      its the judges ruling that is causing this problem. He never gets it right.

      • Mad Dawg says:

        Ian Kawaley is one of the few things stopping outright tyranny by this government.

  9. 32n64w says:

    “The Ministry will now carefully review the judgment and make any necessary changes in line with the judgment,” concluded the Premier.

    Steve, better hope they use lubrication when they come after you again with the “necessary changes” to legislation :-) .

  10. VJ says:

    What I find interesting is that when I had issues with my package on a previous occasion I called and spoke with Mr Thomson directly. He told me that he is not involved with Mailboxes Unlimited and that he only runs Just Shirts, then referred me to a female manager. This company clearly has issues with telling the truth….

  11. Bacchus says:

    tsol and vj are correct in that it is not customs holding up the shipments rather it is Mailboxes shipping company (DHL) who are unable to clear shipments in a timely manner. Just like vj says Mailboxes chose to use a different company to save money, you know what they say you get what you pay for! I hear that the lower duty rate will now apply to all personal shipments regardless of how they are shipped.

  12. Enforcer says:

    Refunds!!!!!!!!!!!!! Is Customs prepared?

    • Mad Dawg says:

      They must. They collected duties illegally. They should announce immediately that over-collections will be refunded.

  13. Codfish and Potatoes says:

    What Mailboxes seems to be saying is that their business will be impacted by the 25% duty rate that applies to personal imports. Well this applies to all the couriers and the Post Office parcel post packages. While is is understandable that the post office won’t complain, why is DHL, UPS, ZIPX Federal Express and others quite silent on the change? Is it because it is no big deal. Only a small number of goods are really impacted by the higher rate and people are still buying overseas as they like. The duty is paid by the customer, not by the transport company, along with fuel charges, insurance, service fees and so on.
    The real real behind the mailboxes suit is because the company wants to maintain an unfair advantage over the competition by using a short cut to making their declarations to Customs. Now you have the truth.

    • Know your facts says:

      Real issue here is money and how mailboxes made more before the 25% duty increase and will do again now that judgement went thier way. Case in point ,in the past they would provide one Bermuda customs declaration for the whole shipment which ment only one set of paperwork for all thier customers with each record for individual customers but the charge a $30 or so fee to each of thier customers as if they were completing 1 BCD per customer. When duty rate rose they then they had to produce 1 BCD per customer which was what they had been charging all along. See the difference,doing one set of paperwork and charging about 300 importers $30 as opposed to doing 300 individual sets of paperwork. He may say whatever he wants to the media and his customers but real motive is profit margin.

    • the real truth says:

      Real issue here is money and how mailboxes made more before the 25% duty increase and will do again now that judgement went thier way. Case in point ,in the past they would provide one Bermuda customs declaration for the whole shipment which ment only one set of paperwork for all thier customers with each record for individual customers but the charge a $30 or so fee to each of thier customers as if they were completing 1 BCD per customer. When duty rate rose they then they had to produce 1 BCD per customer which was what they had been charging all along. See the difference,doing one set of paperwork and charging about 300 importers $30 as opposed to doing 300 individual sets of paperwork. He may say whatever he wants to the media and his customers but real motive is profit margin.