By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Bahamian auto dealers yesterday warned they were facing “a Triple Whammy” of Budget tax increases, after they and other businesses were hit with a largely-unexpected ‘Environmental Levy’.
Testimony by businesses and Customs brokers, coupled with documents obtained by Tribune Business, reveal that the Government - via Customs - is now implementing a previously undisclosed tax on imports that are either potentially harmful to the environment or difficult to dispose of.
The ‘Environmental Levy’ peaks at $200 per imported passenger or commercial vehicle, and charges a variety of fees on tyres, batteries, cell phones, computers and a host of heavy-duty appliances - refrigerators, stoves, TVs, dishwashers and household furniture.
While the environmental benefits sound good in practice, several observers questioned whether the monies raised by the Levy would go into the Consolidated Fund for the Government’s ‘general purpose’ use, as opposed to helping with the proper disposal of such products.
Concern was also expressed as to why the Bahamian business community had not been informed of the Environmental Levy prior to its introduction yesterday, with many companies saying this and other tax increases would only fuel inflation and cost of living increases that would impact consumers.
One businessman told Tribune Business: “Welcome to the cost of living rises.”
Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, told Tribune Business he was expecting “a nightmare” at Customs this week, as both the Department and private sector adjusted to the new and increased taxes bound up in the 2013-2014 Budget.
Tribune Business, via Mr Albury, first revealed the ‘Environmental Levy’s’ introduction last week, but its arrival has caught many private sector importers and their brokers off-guard.
A number have been forced to re-do and re-submit previously completed Customs entries, plus come up with extra, unanticipated funds to pay the Levy and new 1 per cent Customs administration processing fee.
“I anticipate this whole week will be a nightmare around the Customs Department, because when you change taxes, the right hand doesn’t often know what the left hand is doing,” Mr Albury told Tribune Business. “It’s typical of government departments worldwide, not just in the Bahamas.
“I was made aware of this impending Environmental Levy five weeks ago by a Customs broker, but I thought there would have to be pending legislation they would have to put in place. I didn’t know it would tie into these duty changes.”
Documents obtained by Tribune Business show the Environmental Levy has been brought in via regulations.
Of the Budget’s collective impact on the auto industry, Mr Albury told Tribune Business: “It’s a Triple Whammy. You’ve got this Environmental Levy, a 1 per cent Customs administration processing fee, and have this new way of charging duties based on the CIF values.
“I have a shipment of vehicles, BMWs, that are in. My broker is working on those.”
Rick Lowe, Nassau Motor Company’s (NMC) director/operations manager, told Tribune Business: “They [Customs] only told everybody about these changes on Thursday and Friday.
“I got a call from a Customs broker in Abaco, and our guy found out about it when he went to Customs on Friday. It’s what they’re calling an Environmental Levy, apparently, which is logical, but it’s going into the Government’s general fund. It’s all mixed in.
“We did an entry this morning, and it’s built into the Customs entries. They just didn’t tell anyone. We got a fee on a part, but don’t know which part.”
Mr Lowe added that when combined with the auto duty structure changes and other Budget-based tax increases, the Environmental Levy was part of an overall picture that would result in price increases for Bahamian consumers.
“It all goes to the cost of the product,” he said. “How else are you going to pay for it? You can’t give it away.
“They’re [the Government] just desperate for money, but it impacts the price of everything. Welcome to the cost of living rises.”
One broker, speaking to Tribune Business on condition of anonymity, said: “They’ve made significant changes, and once again don’t notify businesses.
“They’ve done away with the $10 Stamp Duty for entry, and now there’s a 1 per cent [of value] processing fee on all goods. They now have a new Environmental Levy on certain items, but don’t have a list to give you.
“They don’t have any policy procedures to tell you how to do stuff. You’re at the whim of the man sitting behind the glass. There’s nothing in writing.”
The 1 per cent processing fee, which is capped at a $500 maximum ceiling, was flagged up in the Budget, in fairness to the Government.
However, the broker added that entries sent into Customs last week were no longer being accepted, and importers were having to re-submit them - increasing time and expense.
“Customs own system can’t handle the changes,” the broker, speaking on condition of anonymity, said.
“They want businesses to pay taxes, they want businesses to employ people, but this involves so much of our time and resources.
“The honest guy that doesn’t do things under the table or pay a special handling fee to make things go through the system, they’re the ones who suffer.”
And he added: “Any new tax is always passed on to the consumer. Businesses don’t pay taxes; they collect taxes and pass those on to consumers in whatever industry they are in.”
Comments
concernedcitizen 10 years, 9 months ago
you have to tax the shrinking private sector more and more if 2/3 of your budget go to civil services salaries ,thats not even talking about their pensions ,on the other hand the day we can no longer afford to try and keep up w/ our irresponsible baby making w/ civil service jobs we will be a war zone ,,uhh sort of like now ,,
The_Oracle 10 years, 9 months ago
Ok, so perhaps now the Private sector will stop Paying Customs officers under the table, Doling out the hams and turkeys and "bonuses" at Christmas!
Aside that, We have not seen anything yet!!!!
I promise!
concernedcitizen 10 years, 9 months ago
perhaps the custom officers will quit selling out the country ,,no we ain,t seen nothing yet taxation just kickin in to high gear ...
The_Oracle 10 years, 9 months ago
If this is an environmental "fee" for difficult to dispose of items, then the money better not be going into the consolidated fund! It should go towards equipping the dump to deal with these things, And Putting the annual fires out!! Otherwise, it is nothing short of fraud.
concernedcitizen 10 years, 9 months ago
every one is dump fridge down a track road anyway ,,,,,,,,,,,,lmao
B_I_D___ 10 years, 9 months ago
@ Oracle...sadly...it will be fraudulent...I can give you about a 99.9% guarantee that the government will misappropriate those funds and the dump won't see a dime to assist with the environmental impact.
leonardo85 10 years ago
The increase in tax is going to create huge problem for them, the government should think twice before imposing any new tax. The dealers are already facing a stiff competition, recently I made a http://www.easterns.com/">visit to my local auto dealer and he was telling me that he is finding it difficult to increase the sales.
karina 10 years ago
I think the government is doing the right thing by imposing this tax but they should spare this sector for a while. The recession have put the sector through lots of troubles and it has just started to recover from the bad phase. Most car dealers these days are trying their best to widen their customer base. Now you can find many popular car dealers online, just http://www.rocklandchryslerjeepdodge....">go to the website and you will be able to explore their inventory online.
dana 9 years, 12 months ago
The auto industry is already struggling a lot to overcome the depressing state it was in due to recession, in such a situation it should not be burdened with new taxes. However, now most car dealers like https://www.kiaofauburn.com/cardealer...">Kia Auburn are taking their venture online to widen their customer base.
isabella 9 years, 10 months ago
The Environmental Levy is definitely going to put a lot of financial stress on the auto dealers. However, the government should reconsider their decision regarding this issue. The recent economic turbulence has been causing a lot of stress for the dealers. The buyers are too not showing interest in investing in new car models. I have recently bought my first car, it is an used Chevrolet model which I bought from http://www.pinegarchevrolet.com/Used/...">PINEGAR missouri.
zinos85 9 years, 10 months ago
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isabella 9 years, 10 months ago
This decision is definitely going to impact the automotive dealers in a big way. They are already struggling to survive in the post recession phase, now this tax would put them into more financial trouble. Right now buyers are also feeling hesitant about investing in new cars. Recently I bought an used car from http://www.lewismotorsalesinc.com/inv...">LewisMotorSales, It helped me save a lot of money.
leonardo85 9 years, 9 months ago
The auto industry is facing a difficult time everywhere because of the financial situation. Now this tax would create even more financial pressure on them. However, the car dealers should consider extending their business on the virtual plain. But the car owners have to be careful about the car parts they use, they should only buy parts from reputed stores like http://www.automotivepartsunlimited.c...">Automotive Parts Unlimited LLC.
dana 9 years, 9 months ago
The auto dealers should not be burdened with this new tax, they should rather be given some financial support in such trying times. However, in some places the industry is experiencing some positive changes too, people are showing interest in buying new cars again. My neighbor recently bought Hyundai Sonata GLS Sedan from http://www.curryhyundai.com/index.htm">Curry Hyundai.
karina 9 years, 9 months ago
Since the auto dealers are already facing serious financial situation they should be spared from paying this environmental tax. The dealers need to find ways to increase their business now, they should consider going virtual, it would help them reach more customers. Most car dealers go online now, for instance, you can find the reputed dealer Princeton Auto Center online at http://www.princetonautocenter.net/">http://www.princetonautocenter.net/.
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