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'Customs Chaos' Fear On 855 Duty Changes

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to give businesses more lead time to implement major system changes, a top private sector executive saying there was “no need” to wait until December 30 to issue changed Customs duty rates and codes.

Gowon Bowe, the Coalition for Responsible Taxation’s chairman, questioned whether it was necessary for the Ministry of Finance to wait until just two days before the duty reductions take effect to release all relevant information.

While the duty reductions to between 80-100 tariff headings, designed to help mitigate VAT’s cost of living impact, have been known for months, Tribune Business was told that merchants and major importers/brokers were only informed of the relevant code changes on December 30.

Rupert Roberts, Super Value’s owner and president, told Tribune Business that with all the sub-categories under each tariff heading, merchants had been given hours to make adjustments to 855 items within their computer systems.

“There is going to be chaos at Customs tomorrow,” Mr Roberts predicted. “There is a new computer system, with 855 changes to be made.

“They’re going to expect us to make these duty changes faster than we can pull it off. They were late, the Ministry of Finance or Customs. Customs said the Ministry of Finance was late to them.”

But Mr Roberts added: “We’re not casting blame. We’re here, VAT is here, and we’re going to make the best of it, implement it, and make sure it’s a success.”

He confirmed that the private sector had been given just over one day to make 855 code and tariff changes in their systems, bringing them into line with Customs.

Mr Bowe, meanwhile, said the Government needed to have a “better appreciation” of the time, expense and difficulty businesses incurred in making major IT system changes.

“There was no need for the rates of duty to be communicated on December 30,” he told Tribune Business. “That could have been done in October.

“There are about 100 goods, but they all have sub-categories, and add up to 855. The main point is: Did we have to wait until December 30? While those in the Ministry and Customs may see it as criticism, it’s a fair criticism.”

While the 80-100 tariff heading reductions had been published in August, the details were left until two days before the duty reductions take effect.

“It’s a bit frustrating they came in December 30,” Mr Bowe added, noting that the first versions of the VAT regulations and guidance notes were published in October 2014.

He called on the Government to “give greater lead time and transition”, saying several months’ advance warning was “not unreasonable”.

The Coalition chair, meanwhile, said public “hoopla” about VAT would likely hit today, once more businesses opened and consumers began to make needed purchases.

“In reality, consumers win from an improving fiscal situation. They also lose because it comes out of their pockets. It’s a zero-sum game,” Mr Bowe told Tribune Business.

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