Airport Duty Rate Returns To 25%

February 24, 2012

In her Budget Statement this morning [Feb. 24], Premier and Finance Minister Paula Cox announced she would be rolling back the 10 percent hike in duty introduced at the end of last year.

In a bid to stimulate the island’s stagnant economy, in November the Premier [pictured] formally introduced measures in Parliament increasing the rate of duty payable on accompanied goods imported for personal use from 25 percent to 35 percent.

But today the Premier said while most tax rates would not be changed in the coming fiscal year, there will be an amendment to the customs tariff for personal importation of goods at Bermuda’s ports of entry.

“At the L.F. Wade Airport, the duty rate will be restored to a fixed rate of 25 percent but the allowance will be raised to $200 per person with effect from April 1, 2012,” she said. “The duty rate for personal importation of goods will be harmonised at all ports of entry at the fixed rate of 25 per cent.”

Last year’s duty increase at the airport was intended to encourage Bermuda residents to spend more money in the local retail economy.

“These measures are intended to discourage personal spending abroad, and to help steer expenditure into the local retail sector, thereby boosting sales and keeping approximately 4,000 Bermudians employed in local stores,”  the Premier said at the time.

Last month the Bermuda Chamber of Commerce’s Retail Division called for “an across the board, standardized duty rate of 25%” regardless of how they are imported. At the airport the rate was 35% however via other methods of import, the rates vary from 5% to 33.5%.

Mailboxes Unlimited president Stephen Thomson had spoken out against additional duty increases, urging residents to contact theirMPs, call talk shows or take other actions as a duty hike would be “destructive to both residents and Bermuda as a whole.”

The Premier said at the time “because of the inconsistent duty rates across methods of import, Government efforts to support local business are not as effective as intended. Therefore the Government will examine changes to duty rates for personal imports.”

A statement issued by the Chamber said, “The Chamber’s Retail Division is on record as having reached out to the Ministry of Finance, and in particular the Premier, in 2010 and again in 2011, for tax relief and other fiscal support to keep their doors open.

“Since that time the Retail Division of The Chamber of Commerce has through its membership, continued to lobby Government for an across the board, standardized duty rate of 25% for the importation of all personal goods, whether they are imported through the airport, the post office, a local courier, shipping agent or consolidator.”

Chamber executive vice-president Joanne MacPhee elaborated: “The Chamber’s Retail Division is supportive of a move to standardize the import duty charged on personal goods.

“Bermuda’s retail industry is in crisis and like many of our divisions they do need Government’s support if they are to survive in this harsh economic climate. The EEZ and newly branded BEDC are alongside others, doing their part to support local commerce, and we applaud them for that.

“We all know there are less people in Bermuda now then there was three years ago, and those who are here are spending less and shopping more online. This is all having a very direct and negative impact on local commerce, so yes something has to give if local retailers are to survive.”

“What that might look like has yet to be agreed. Perhaps this is the time to step back and look at the bigger picture and consider whether or not there is a viable alternative to taxation through import duties,” concluded Ms MacPhee.

View all our coverage of the 2012/13 Budget here.

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Comments (21)

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  1. Hmmm says:

    the 35% rate did not work. It seems everything she does is on a trial and error basis. What next

  2. James S says:

    So if you are a business bringing in eletrical goods at 33.5% you now pay more than the individual who can bring them in at 25%. This will surely hurt local business.
    The air conditioning industry and TV shops must be very upset about this.

    • Sandgrownan says:

      Er no…you may pay more duty…but you’re not paying it on retail prices

  3. James S says:

    Does this mean I can bring a car in for personal use at 25%?

    • You are dim…

      • Death to party politics says:

        I think it’s a fair question. The current car duty rates for personal importers is 75% duty on the first $12,000, and 150% on anything above that. If the duty rate for ALL personal imports at ALL ports of entry is 25%, has it been stated that cars are excluded from that?

    • Bewildered says:

      If it will fit in the overhead bin, sure.

      This sounds very much like a vote catcher. She must have received so many complaints about penalising shopping trips. It was a no brainer that this increase to 35% would not help retail. Further proof it was ill thought out is that not only is it reversed, but the allowance is increased from $100 to $200.

  4. Big whoop says:

    Well I’ll pay my 25% have all the selection I want and still be alot cheaper than buying bda. Not to mention most of the time the customer service is better.

    • Pleaseee says:

      How about ALL of the time the customer service is better!

      • Big whoop says:

        most of the time i will try and shop BDA but you can only go so long.You either get somewhere and there is no selection or you get made to feel like we’re disturbing them by expecting them to do their job. um what ya mean i can’t text or bb while working you have to wait, Or regardless if we’re having a horrible day if i don’t say good morning(because for me it isn’t a good morning)i get the stare and the morning(hand on hip).i appreciate it’s part of our culture but some days i just want the service i’m paying for.

  5. misleading numbers says:

    It should be known that the increase from 25% to 35% was actually a 40% increase in the rate. This is the same misleading use of numbers that occurs in so many political discussions.
    For example the increase in pay roll tax in 2010/11 from 14% to 15% was termed a 1% increase when the true increase was over 7% [Math used:(1/14)x100 = 7.14].

  6. Curious says:

    Ok so maybe i read it wrong, so its 25% on everything now ? Like mailboxes etc? As well as bringin it thru d airport?

  7. Let's Talk Some Sense says:

    This woman does nothing that makes any sense. Trial and error is meant for rookies. This woman is our Premier. Make a decision and stick to it. Even if you don’t have any experience or common sense at least humor us all and pretend to. Geesh

  8. is B..Leaving says:

    Rollback on things EVERYBODY uses If only she could , but she can’t , food , electricity and fuel .

  9. bermyluv says:

    I’m very curious about whether this will apply to jewelry and the sort. There is no way I would have ordered and shipped my wife’s engagement ring from overseas if I had to pay 25% instead of 6%. I would have just taken a trip and bought it while I was out there. Then I would have flown back with it in my boxers or my tummy…lol.

    That would be a lot cheaper than the 25%.

  10. rightious vigilant says:

    this woman is full of sh#t!

  11. Hey Bye says:

    Roll backs and shell game governance, if you want to call it governance.

  12. Cancer says:

    We shud be used to rollbacks by now – it’s the flip-PLoP PLP – that’s all they do – flipflop!

  13. bermyluv says:

    PLP…please take your barbed peni$ out of my a$$…please!!!

  14. Unclenick says:

    Paula Cox is a disgrace. For some who went to school for maths. Sure as hell doesn’t know how to count. She needs to step down or be fired!