Govt 'gives no favours'over duty rate revision


Tribune Business Reporter


A Bahamian juice drink manufacturer yesterday said "government hasn't done us any favours" despite partially reversing its decision to eliminate the 60 per cent tariff on rival imports.

Mervin Sweeting, Switcha Bahamas' chief executive, told that Tribune Business that the tariff rate's slash to 30 per cent should have been accompanied with the introduction of incentives for local manufacturers.

He suggested that the Government look at reducing electricity costs for Bahamian manufacturers; eliminating Business License fees or allowing it to be calculated on net revenues; or allowing the sector to bring in bonded vehicles.

"In essence they didn't do us any favours," Mr Sweeting said. "The challenge is, even if they decide to drop it, they should at least have something to help the local manufacturers in terms of incentives.

"If you are going to give foreign brands incentives by dropping the duty, the question is what are you going to do for Bahamians to be competitive. If the duty is only reduced 1 per cent it has to be reciprocated for manufacturers. You're still effectively giving power to the foreign brands. It's still unfair in any event."

Mr Sweeting, whose company employs 20 people, added: "We're still growing. We have a lot of growth to do. We have made significant investments in our manufacturing process and the company as a whole.

"The Government has to be wary on discouraging manufacturers. At some point in time it is just going to be easier to set up shop in Miami and import it. All I'm saying right now is that there has to be a trade-off. We can't say thank you for that."

K Peter Turnquest, minister of finance, confirmed yesterday that the Minnis administration had decided against a complete elimination of the 60 per cent tariff on imported fruit drinks, and slashed it to 30 per cent, while maintaining the 45 per cent tariff on imported paint.

"We decided that we want to give the manufacturers some time to adjust their business model, and we decided rather than make imported fruit drinks duty free we meet them half-way, and reduced the rate to 30 per cent from 60 per cent," he explained.

"On the paint, we left it as it was at 45 per cent in the hopes this will give them the protection they need for another year to refine their processes, bring their costs down and look at other ways to increase market share.

"Right now, locally manufactured paint is less than 5 per cent of the market. That's a problem, and we are placing the burden on the public to support one manufacturer that is not improving on or increasing its market share. Over the next year, we will look at how we can help them to be more competitive, improve their processes and increase market share."


John 6 years, 10 months ago

It is good to give protection to local products by putting high tariffs on imported products. But a 60 percent duty on juices and drinks is really too high. A thirty percent duty is more livable and at least gives the consumer an option, rather than blocking out the market completely. Tariffs that are too high also to importers trying to find a way around the tariff to remain competitive and so both th local producer and the government does not benefit.


Sign in to comment