The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A 15 per cent reduction in the Government’s import duty collection costs is being targeted over the next five years, along with increasing the proportion of taxes/duties paid electronically from zero to 80 per cent.

The objectives are outlined in an Inter-American Development Bank (IDB) report on its proposed $16.5 million Trade Sector Support Programme, an initiative designed to boost revenue collections and enhance trade through improving Bahamas Customs’ processes.

Targeting 2017 as the deadline for achieving the project’s goals, the IDB report said it aimed “to reduce the negative impact of revenue-related offences such as misclassification, valuation and contraband”.

Other key targets are a 70 per cent reduction in the average time taken by Customs to clear an import declaration, dropping this from 24 hours to 7.2 hours.

The project is also seeking to reduce the cost of submitting an electronic import/export declaration from $20 to zero, and “reduce the total clearance time of imported goods from the time of physical arrival to exit from Customs facilities from 72 to 24 hours - a two-thirds reduction.

The IDB report also projected that a strengthening of Customs’ institutional capacity would “reduce the cost of collecting revenue by 15 per cent” by 2017. Using Customs’ own internal ratio of personnel to revenue collected, the goal is to drop this from the current 2.8 to 2.4.

And, when it came to improvements resulting from the modernisation of Customs’ operations, the IDB report forecast that, by 2017, there would be:

• An increase in the number of cargo manifests submitted to Customs electronically, and in advance, from 25 per cent to 85 per cent.

“There is a need to ensure that all commercial and non-commercial transport operators, including private craft (air and sea) ,provide manifest information electronically and in advance,” the IDB report said.

• An increase in the number of Customs declarations submitted electronically from 2 per cent to 80 per cent.

• A rise in duties and taxes paid electronically from zero to 80 per cent.

• Import declarations subject to manual, physical inspections reduced from 80 per cent to 10 per cent.

• An increase in “positive results”, or seizures, from physical inspections from their current 5 per cent low to 50 per cent via a new risk management system.

“Efficient and proper use of profiling under the new risk management approach should lead to better targeting and increased number of positive hits,” the IDB said.

• Growth in the number of post-clearance audits conducted annually by Customs from zero to 25, with 100 per cent of all major importers subject to these assessments.

“Post audit control should become the primary com- pliance verification process, replacing the declaration-by-declaration method currently employed,” the IDB report said.

“This should lead to a significant increase in the number of controls conducted.”

• A 100 per cent increase, or doubling, in the number of Customs seizures made annually from 60 to 120.

“The development and implementation of a Customs enforcement strategy should lead to an increased number of seizures of contraband, covering drugs, undeclared imported goods, intellectual property rights (IPR) infringements, etc,” the IDB report said.

Bahamas Customs, the document added, had already committed to bring its administrative and operational procedures in line with international best practices via a Letter of Intent sent to the World Customs Organisation (WCO), which pledges to implement its Framework of Standards to Secure and Facilitate Trade (SAFE).

The $16.5 million IDB-funded project is designed to create a new organisational structure for Bahamas Customs, including new units “such as the customs workforce development unit, recourse unit, internal affairs unit, origin unit, intellectual property rights unit, client services, valuation, risk analysis, and post clearance audit”.

Outlining the project’s overall objective, the IDB report added: “Bahamas Customs will have an upgrade of its operational procedures, a cutting edge automated system, and the service-oriented technological platform and programmes in place to increase measures of trade facilitation, while balancing control and security.

“These improvements will benefit the private sector and other government agencies involved in import and export operations by reducing the direct and indirect costs of international trade in the Bahamas.”

The IDB report added that the project had the backing of both the newly-elected Christie administration and the private sector.