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Don’t let reduction in duty excite you too much- deCastro
On February 14, 2012, after heated debates on both sides of the floor and a lengthy Committee Stage in the House of Assembly, the Customs Management and Duties Amendment Act 2012, which needed a majority vote for it to proceed, was passed. The bill makes way for duties to be relieved from the cost of Freight and Insurance of imports by businesses, which would cost Government some 3.7 Million dollars per year.
According to Premier Dr. D. Orlando D. Smith, his Government saw the need to revive the economy and the bill is seen as one way of stimulating the business sector and that Government was also looking at other ways of enhancing commerce.
But according to Donald deCastro, he welcomes the bill on the grounds that he never thought it was fair to pay duty on insurance and freight but does not see the bill making a difference to the average consumer unless the issue of freight is tackled. “There is not going to be a whole lot of savings in any quick period of time...Our politicians and many people and the consumers are under the impression that our cost, the retail cost in this country is high and the politicians give the impression that it is the fault of the wholesalers and retailers. They are not attempting to get to the root of the problem. The root of the problem is the freight,” deCastro commented on his radio programme Straight talk on February 14, 2012.
According to him, a company that travels between Miami and St. Thomas and Miami and Tortola will charge, for example, $500 to bring a car to St. Thomas and $1500 to bring the same car to Tortola. He said this is so because freight charges from one US port to another US port are controlled by the US Department of Commerce and anytime those freight companies wish to raise their freight charges they have to apply and to have hearings, which sometimes take months before the increase can be approved.
“If they not getting it fast enough they cap it on to a foreign company because they don’t have to get permission to go. So until our government decides to attack the problem at the core and get to these shipping companies and see how they can negotiate, subsidise or what the case may be, to get those freight charges down, reduction in duty is not going to be no major help.”
Noting that he is an importer, Mr. deCastro gave an example from which he said was an invoice in his possession. He said the cost of the item was $413 and without insurance and freight, the duty on that would be $61.95c and with the insurance and the freight the duty would be $75.51c. “So what is the big difference on that? A few cents, which makes a lot of difference to the government and to the country but individually it is not going to be a whole lot of money right away. So don’t let that reduction in duty excite you too much at this time because that same item that I mention cost $413 this week I can order it next month and it could be a lot more because whenever I ask my supplier for a quote they say this quote is only good for 15 or 30 days and if I don’t order it within that time is a strong possibility that the price will go up.”
All members of the opposition stood up against the bill with 2nd District Representative Hon. Alvin Christopher saying he could not support it in committee stage unless “serious amendments” were made to it. He said he had no problem giving incentives to businesses but the savings that the bill is supposed to create will not benefit those intended to benefit as it is not sufficient to pass on to the consumer since the percentage is small.
First District Representative Hon. Andrew Fahie also raised concerns about the savings being passed on and noted that the move will not show results tomorrow in supermarkets and that the savings would be very small and would also take some time to be felt. He also asked how Government would get back the some $3. 7 million it will be losing. Hon Fahie, also said Government needed to go after the cost of freight by subsidising some of the local shipping companies and sending them to the mainland and let them return with their freight at a more reasonable price.
Minister for Communications and Works Mark Vanterpool said he was disappointed that Members of the Opposition would create politics with the bill regardless “whether consumers would save or not”. He said the bill was just one of the efforts of Government to reduce cost of living and should be welcomed. He also said he was very enthusiastic about the bill and would not be discouraged by words from the Members of the Opposition. “It’s a start in the right direction,” he said while noting that the Premier should be congratulated for taking such steps to address the cost of living in such a short space of time in office and did not wait until it was close to elections to do so.
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