Thomson: “Sad Day For Consumer”
Mailboxes Unlimited president Steve Thomson said it is a “sad day for the consumer in Bermuda,” following the news in the 2012/13 Budget that duty at all ports of entry will be 25%.
Noting it represents close to a 400% increase on duty on clothing, Mr Thomson questioned whether local clothing retailers were “negotiating the increase with the government.” The businessman also said the “playing field is not level with regard to retailers” as they enjoy no payroll tax burden, which shipping companies have to pay.
“It is evident that virtually all businesses in Bermuda are suffering due to the current economic climate. This move will injure all businesses associated with shipping, courier, post office, air freight etc. Are job losses less important in these companies?” said Mr Thomson.
“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,” the Premier said in her Budget statement. “The duty rate for personal importation of goods will be harmonised at all ports of entry at the fixed rate of 25 per cent.”
“I am disappointed that the government chose to increase the duty rate to 25% across the board for importing personal items.
“Clearly, this has been an extremely unpopular move as evidenced by the 3500 signatures on the petition in addition to the high volume of negative comments from Bermudians and residents.
“It represents close to a 400% increase on duty on clothing, 300% on cameras, 250% on shoes etc. It will hurt regular hard working Bermudians who have demanded a choice in what they buy and where they buy it.
“Clearly, it will also hurt our business and all shipping companies in Bermuda. The playing field is not level with regard to retailers. Currently they enjoy no payroll tax burden (shipping companies do not have this beneift). Additionally, they will now have preferential duty rates far lower than individuals can receive.
“This move by the government was encouraged and in fact negotiated by the large retailers using the threat of job layoffs.
“It is evident that virtually all businesses in Bermuda are suffering due to the current economic climate. This move will injure all businesses associated with shipping, courier, post office, air freight etc. Are job losses less important in these companies?
“Protectionism and government intervention in any business is concerning. I anticipate this move will lead to increased inflation in Bermuda as the competition that was created for local retailers will be removed clearing the way for the retailers, who by their own admission are losing money, to increase their prices significantly. This will hurt the consumer locally.
“I question whether the punitive duty rate being imposed on the people will, in fact, have the desired effect of forcing residents to shop locally. The reasons are many for shopping abroad but include, choice, price, ease, 24 hour shopping etc. From comments I am receiving, this wont easily change.
“It is interesting that this move appears to attempt clothing retailers as the duty rate for clothes moved up by almost 400% whereas the duty rate for electronics moved up only 10%.
“Were the clothing retailers primarily the ones negotiating the increase with the government? All in all it is a sad day for the consumer in Bermuda,” concluded Mr Thomson.
View all our coverage of the 2012/13 Budget here.
What is sad is the prices that Mr.Thompson charges for items to be brought in through his business, Mailboxes. Many times my wife has used his services and has paid more to bring the item in than it cost for the item. Why don’t you stream line your costs, make a smaller profit, give the consumer a little break and maybe you’ll see more business regardless of any additional hike in duty. Don’t get me wrong I’m against any incresases in duty but come on Mr. Thompson you’re no better than the government.
Ever tried to buy bubblewrap, envelopes or tape at Mailboxes? Talk about high prices and price gouging. His prices must me so high because of the shipping rates! Steve book I’ve it up.
I would also have to agree with you that is why i stopped using his service also…
Thomson’s transparent lobby failed and failed miserably. He has been virtually ousted by the Chamber for making representations that were not true, establishing a one man Shipping Division and making comments that were and further validated by their comments today, clearly contradictory to the Chamber’s position. The Chamber is in favor of the 25% custom duty. Read the story.
I am a business owner and I support the enterprise, but Mr. Thomson, your style is offensive. In this exercise, your true colours have been shown and I, as a regular customer of yours, am offended by your recent actions and comments. I will be closing my account. You are doing well (Heron’s) so you should have just shut up given your obvious bias and let the chips fall where they would have. We all see you for what you are – simply a businessman looking to fully exploit the landscape, customers in this case at the expense of the local retailers – who do rely on the spending of residents. We are not as stupid as you think. Those that shop through you will continue to. Your demographic is that of the foreign worker (IB) who don’t and won’t shop locally as they have exposure to other markets and our choices here too few. Any falloff in your numbers is not due to duties hikes but to the exodus of your market. Anybody right now who is importing goods from overseas, buying couches from Pottery Barn, Williams Sonoma or whatever are doing quite well, thank you. Many of whom do not feel the impact of the current recession beyond the fact that they have been able to reduce their rent by at least 10% over the last 3 years!
The byline should have read – Its a sad day for Steve Thomson
Steve Thomson is looking out for his own interests but also speaks up for thousands of Bermudians and residents who are trying to find bargains by shopping online.
Online shopping was beginning to take us out of the bad old days when local shops can charge what they want, knowing there is little competition. The PLP has just made a hugely regressive step.
Yep, I too am appalled by Mr. Thompson’s self-serving rant. An my Wife and I do buy Bermuda and given the need to do otherwise, “Mailboxes” will certainly never be on our list of places to resort to. Shot yourself in your own foot…probably par for the course.
Well at least the PLP is sticking to their promise of getting back at the rich white men!
LOL. SAD! We going to be the new Jamaica real soon!
Hardy, that old money is in property and front street retail surely.
If anything, this move has helped to save the old money. Really, how many of the store owners are PLP voters?
@Maybe I’m Slow says………”What is sad is the prices that Mr.Thompson charges for items to be brought in through his business, Mailboxes”. Yes, Yes,,, Mr Thompson fees are high!! I purchased 2 dog beds at Targets for a total of $24, brought in via him. I had to pay his company $80, The dog beds were small size, weight was less than 10lbs. I was shock at the cost charged by his company, that I requested my account be closed as fast as possible. I decided he was much too expensive, have not used his company in over 3 years.
@ Crisse, it not about getting at the white man, it is about fairness across the board. Some of the prices that we pay for goods in Bermuda are not fair. So lets not lower the level of this debate with silly talk.
PriceBusters and Conspec just became my ‘retailers’ of choice. They’ll bring in ‘one-off’ items for you at the real rate of duty.
Screw the Irish Linem Shop. I’m making it a point now to boycott local retail as much as I can.
I thought Conspec shut down???? I was told they were asked to vacate the premises. Glad to hear this wasnt true.
Operating out of a home office or something..but still in existance.
Just rip off the price tags of new clothes and shoes bought overseas. That’ll show em.
Customs will ask you for invoices, and have the ability to use the internet as well. THey aren’t new to your scam. When you get caught don’t cry about the fact that your goods are confiscated, yoiu are taken to court and are forced top pay 3 x more duty or fined.
It must be hard to be a PLP supporter. I mean one minute they are raging about the cost of living is in BDA and then in the next breath defending their party’s decision to raise taxes and make everything just that little bit more expensive.
It must be extremely hard and confusing all at the same time
Yes, their much touted “Price Commission” that was going to investigate those high prices charged by whitey seems to have gone silent.
It is surprising how people who complain about the prices businesses charge, are quite happy when the government increases duty on imported clothing to 4x what it was. Some people just enjoy paying more for their purchases I guess.
I can’t understand why all the vitriol for Mr Thompson. He was trying to avoid an increase in the cost of living for Bermudians. No one is forced to use Mailboxes. But we all are forced to pay whatever tax the government shoves at us.
no you are not forced “to pay whatever tax the government shoves at us”
As you consumer, you may choose to:
1. own a boat – and pay whatever applicable tax
2. own a car – and pay whatever tax
3. own a house – and pay whatever
4. smoke – and pay (you get the hang of it now)
5. shop online
6. have a business
7. drink
You can manage your taxes….and if the taxing policy of the jurisdiction in which you live is no good for you, you will be subject to the departure tax on the way out.
Why is there always a bit at the end of some people’s posts that is basically saying ‘if you don’t like it you can leave’? Is it supposed to be some kind of threat? Makes you appear childish.
Rick R is right.
People have the choice whether to do most things, there is no choice about taxes. This change will just add to cost of living for most ordinary Bermudians. I can’t see how it will help retail. If each thing I buy costs more I will buy less things.
Rick says we are forced to pay whatever tax the Government shoves at us. 411 says that’s not trues because you don’t have to buy certain items and so avoid tax. Both are true though. If you want to buy certain items you have to pay tax, or not if you don’t buy them, but you have no say in the tax itself. The same way that those who don’t like Mailboxes don’t have to use it. The point is there is a choice, as Riley B stated.
Higher taxes on your points 4. and 7. fall under a “Sin Tax” in some US states. But again, as for the rest of the aforementioned points you listed, those are taxes that technically can be avoided / do not have to be assumed if you do not take on ownership or shop online.
It’ll be interesting to see how this “revised, revised” taxing scheme works…
As a consumer I do not like having my hand forced in paying high taxes, but then again I guess one way to look at it is we could have been paying 35% (who knows maybe 25% is just a precursor to 35%)…
411,
Let me make the point simpler for you.
If you bring in clothes: you will pay tax.
You bring in shoes: you will pay tax.
You bring in toys: you will pay tax.
You bring in a CD, a computer, a part for your car, you will pay tax.
You don’t have to use Mailboxes for any of those things. Use someone else if you feel like it. But whatever means you use to import, you will have to pay the new tax on the clothing, shoes, toys, CD, computer, or whatever. And that tax has just been increased.
The cost shipping has not been increased. The tax has been increased.
@ Rick I could not have said this any better. I believe Steve have an axe to grind but that should not stop us from seeing the points he have raised particularly the 4x increase on clothing. My selfish perspective wonders if the books I import will also attract this 25% duty. I sincerely hope not.
As you sound like an avid reader, you know that books as per the tariff are 0% duty. I would imagine that has gone up to 25% as well.
I agree with Rick Rock. At least when you bring in goods through the airport you get the $200 duty free allowance. Do we get that when importing goods through the mail?
So only the rich people who can afford overseas trips get a break. The less well off family who orders a few baby items off Amazon, or some sale goods from Lands End pays through the nose.
Thanks Pee el Pee
The growing family are the people who will take a huge hit. Wonder how many of them will vote PLP this year again?
Don’t blame Thompson. He did not set the duty to 35% for clothing, & everything else. He will simply pass it on to you, the importer. Don’t like his rates? There are plenty other options for shipping. Use one of them. They will pass the 35% on to you as well.
Sure must be tough to be a die hard PLP supporter these days. Getting the shaft every which way.
…yet the sheeple will continue to vote for them. Boggles the mind!!
It is not the PLP government, but rather the greedy retailers and business like Mr Thomasom that charge such high rates. So no it is not hard being a PLP supporter. Far too long most retailers have over priced their items. Most items are marked up almost 8 times. Shipping is also marked up at least X5. This new duty just brings them all on the same playing field. So who is playing fair now?
oohhhh Specialgirl4you has learnt how to cut and paste.
Im a bit confused at your analysis here..
you blame the greedy retailers who charge too much?
you say most retailers have charged far too much?
and now you support govt tax increases that
a)make overseas purchases more expensive (same playing field)
b)forcing/pushing more people to have to go to these same retailers that you say are overpriced?
I dont see how this helps the public.. they are still paying more than they previously were?? how does this help those who couldnt afford “greedy retailers” beforehand?
SoecialGirl, I don’t think you have been following the events here properly. Mr Thompson competes with all the other shippers and importers. If he charges too much, use someone else.
On the other hand, if you want to import something you WILL have to pay the new higher taxes that the Premier announced on Friday.
If you’re annoyed about prices going up, and you want to complain, at least have the sense to work out who it was that made the prices go up.
@Specialneedsgirl do you bring in your own medication or do you buy Bermuda?
No doubt Steve Thompson has a business to run and no doubt this will negatively impact it.
But I don’t see why everyone is trying to defend a PLP tax grab by claiming that Steve’s motives are purely selfish. Nobody is forced to use Mailboxes. There are numerous other options including mail.
But regardless of which method people use, the duty increase will simply make living in Bermuda that much more expensive with a knock on effect on the cost of running a business that much more expensive [and don't think IB isn't looking].
As for Steve’s business (and that of the other importers) he employs people. He pays payroll tax (which retailers do not). So why all the negativity towards him (unless it’s simply a knee jerk “the PLP can do no wrong”, even though this time they did).
what – no slightly creepy picture of a semi clothed teen?
who are the retailers most likely to be supporting politically?
Good day all,
i have a question since it has been Across the board does this mean i can now bring in a car and boat at 25% now?
Sounds to be true from what she said, but at the same time this is not for local bussiness it to help get more money for Government.
Have a good one everyone.
You will find it is across the board for anything that was 25% or under. Anything that was over 25% like stereo equipment etc that was 33.5% will still be 35.5%. It is not really harmonised. You need to see the actual instructions to Customs.
yes i need to read it, but at the same time she is misleading the people saying its across the board.
it is or it isn’t
o well, vote right people.
Very sad day indeed for Steve Thompson…err… I mean Bermudian consumers, yeah, that’s what I mean…..
Steve’s not the one that will be paying the additional duty. You will.
How will H.M. Customs determine whether goods being imported are personal or commercial?
you will have to show proof you own a company.
Cool. I own shares in Walmart. Does that mean all I have to do is show my share certificate evidencing ownership and I can import clothes at 6.5%?
Umm Bermuda company lol.
Bsuinesses importing goods have a number.. It has been that wy for 15+ years now…I cant remember what it is called.
Trader ID. Which brings me to this question: what’s the criteria for getting one?
I don’t remember exactly as I had to do it so long ago when customs switched to the caps system. I don’t remember it being very difficult or complex though.
It is not the PLP government, but rather the greedy retailers and business like Mr Thomasom that for long have charge such high rates. So NO it is not hard being a PLP supporter, infact this will bring to the front what is really going on. Far too long most retailers have over priced their items. Most items are marked up almost 8 times. Shipping is also marked up at least X5. This new duty just brings them all on the same playing field. So who is playing fair now?
Huh? That doesn’t make any sense at all.
Mr. Thomasom (sic) was operating a service that allowed you to obtain certain items at less cost that your “greedy retailers” were selling for locally. The PLP government (not the UBP or OBA or the BIU or the yadda yadda brigades) raised the duty at the request of the “greedy retailers” so now you have to pay more for everything. This is NOT the same playing field. Gibbons et al can still bring in clothes at 6.5%. You will pay 25% even if you use the post office.
It never ceases to amaze how little people like speccialgirl understand of how business & the world in general tick.
The 35% makes no big change for the courier companys. Their shipping rates stay the same, governed by their costs & competition, of which there is much. The 35% is straight pass on to you the customer.
Don’t like the increase in importing costs from Lowes or whoever? Complain to Paula & the PLP regime who are desperate for money to pay day to day costs of Government.
@Specialgirl4you:
Stop exageratting about the markups! People like you are a huge part of the problem. Trash talking without facts! If you have experienced an 8X markup + 5X markup on something…say what and where? Yes things in Bermuda cost more, but Im pretty sure you are not complaining when you look at you paycheck each week and know that you are likely getting 2X – 5X what the same position in the US would cost.
Special girl – you don’t understand: the shops will continue to charge the same high prices, probably even higher than before now as they no longer face so much competition from online retail.
Please explain how raising duty for personal imports will stop retailers from over-pricing, or create a level playing field.
If the mark ups are 8 x or 5 x then don’t buy, try somewhere else. If that fails import it – it must be cheaper. You need to think before copying the knee jerk, ill thought out, lying type reaction beloved by the Government. For example, four months ago the change in duty and allowance was made to protect retail. Now the duty is rolled back to the same but the allowance doubled so it wasn’t to protect retail was it? By the way, compare what you earn to someone in your psoition in the US. I expect you earn more. Yes, because Bermuda is more expensive, so make it cheaper and you can earn less.
@Specialgirl, I wrote the below a couple of weeks ago on the RG site before the tax hike. Hopefully this will help you to understand how this will negatively impact your wallet whether you shop overseas or not. Also you can import goods straight to bermuda through the postoffice as a lot of websites are now offering shipping to BDA (overstock, American Eagle).
Would there be any competition left for the local retail community if duty was hiked up to 35%? Let us say for example that I find a jacket online for $100. I buy that jacket, pay the $5 taxes in the US, the US shipping for $5 (shipping from store to my zip-ex or mailboxes address), ship the item to Bermuda for $30 and now pay now $35 in duty. My $100 jacket cost me $170. Let us say that the Bermuda retailer buys that same jacket at $70 wholesale, they ship the item to Bermuda for $10 (remember they are going by boat and it is bulk shipping therefore it does not cost nearly as much as my personal shipping), they pay 6.5% duty of $5 (rounding numbers up for simplicity), and they pay $2 for the local guys to bring it from the dock to the store. They now have the jacket in hand for $87. They of course need to mark it up to cover their overheads and make a profit … so now the jacket is $150. BUT WAIT!!! If the Bermudian wants to bring it in then it would cost them $170! So now the store it thinking “heck, we can make another $20 out of this because where else is the Bermudian going to buy this jacket from”!
@Special Girl
Someone made a comment about Bermuda offering online shopping. Below is my reply.
“Just Is Justice” is spot on with his/her suggestion of Bermuda stores offering online shopping. NOT just having your store name and contact details listed, but an actual proper online store where prices are listed and you can add them to your cart and purchase them. This will also allow people to COMPARISON SHOP and find the best value for money. This could also boost the web media businesses who will likely build and operate the website. And if you offer delivery for a charge of $5 or $10 then this could even be a part time delivery job for someone.
So you see, those greedy retailers can now be even more greedy!!!
SoecialGirl, you obviously have such a clear understanding of how to run a business. You should set up a shop in Bermuda and sell things for a “fair” markup. That will mean that you charge, what, about one eighth of the prices charged by all other retailers?
You will be able to employ a lot of Bermudians, since you won’t need any scummy expats there, and you will I’m sure pay them well, give them all 20+ weeks vacation a year, plus another 14+ weeks of sick pay. You, lady, are a business genius, and you need to show all those “greedy” people who currently own shops, how it should be done. At the prices you will charge, your shop will surely be very successful.
Ive seen shoes costed at $6 marked up tp $99
books and stationary at $2 marked up tp $20
so yes, some stores just enjoy the captive market
I refuse to shop locally though I do look and window shop in these places
only to laugh about it later
Dyson in Gorhams $1299, $349 online
Gimme a break my money isn’t that easy to grab
Bermuda is runnin itself into the ground and when it does, the expats you all hate so much will leave and you can have the place
He who laughs last…
This is something to think about. I am sure that Bermudians will continue to shop overseas, it is a way of life nowadays because the greedy retailers don’t have any creative buyers. They all bring in the same stuff when in reality there is far more variety out . Take a trip down town and see the junk that is in some places and so expensive. All the stores have hugh sales going on but people still dont buy. This so called harmonizing could have negative impacts on these shipping businesses. If we cut off our support of these businesses, there goes more jobs. So we are really chasing our tails.
The basic problem is not with Retail vs Internet. Rather it is to do with how Government taxes in the first place. Service sectors such as accountancies, lawyers, doctors are relatively untaxed. Retail traders on the other hand have to pay large sums before they have sold a single item. It would be far better economics if all local businesses were taxed on their revenues to spread the burden more evenly. We might then have a more vibrant retail sector and perhaps well off lawyers, accountants and doctors might finally pay their fair share of the tax burden instead of leeching off the rest of us.
Problem is that the most common complaint we hear about local providers of professional services to IB is that they are far too expensive relative to their opposite numbers elsewhere. If you want to add taxes to those costs, feel free, but don’t be surprised if that results in more jobs leaving. [Don't forget that much (most?) of the functions in question can be performed elsewhere.]
Most people ordered online because it was cheaper so in turn she raises the amount of duty. Smart. People who not only buy what they want online but some of us who have to get stuff online that we NEED and cannot get here are to suffer. I can understand 25% at the airport because obviously those people can afford to travel overseas and shop but now everyone is forced to make do with whatever crap local retailers just expect us to buy because they are local. They’ve never, ever, ever had to compete. They’ve never, ever, ever offered any good discounts or incentive to buy what they sell. They have been catered to for a long time. This is absolute b.s.! Our local stores in 2012 don’t even have fully functioning websites. That’s the least of the many issues they have and why many Bermudians take their business elsewhere.
I use mailboxes and yes they are expensive but at least I get what I want and need! When I can get items for 75% off the shipping costs levels it out with what I would have most likely had to pay anyway. I was just in Town yesterday and those stores are pathetic. Nothing worth buying at all.
Am I the only one who has the good understanding of math????
Mr Thomson, for someone who runs a business I am a bit afraid for you if you cant calculate something as simple as a change in percentage…
The increase is not 400% for shoes or any of the other figures you presented. Percentage change is calculated by finding the difference between current and initial (18.5%) and dividing the difference by the initial (18.5%/6.5%) which gives you 285%.
I dont know about you but a 285% increase is much different from 400%. Im not saying that I agree with the changes that are being made but I just feel that if you are going to come out making bold statements, maybe you should do the correct math.
If the current rate for an item is 6.5 percent, and it increases to 25 percent, the calculation is legitimately 25/6.5. The new tax rate is 3.8461543 times the previous rate. Or, put another way, the new rate is 385 percent of the old rate.
That is not the same as the “percentage change”, but it is equally valid, and arguably more descriptive.