Import duties reduction to begin in August

Businesses can expect to see the 2% reduction in import duties take effect from 1st August, the Premier has confirmed. He said the initiative aims to give local businesses a break and to encourage residents to buy locally. The Chamber of Commerce has supported and advocated for lower import duty rates for locally licensed businesses for many years and has promoted a Buy Local campaign for more than 30 years. The cost of doing business, however, has increased dramatically over that period as the size and scope of Government has expanded into areas better served by the private sector. While the 2% import duty reduction is welcomed, the Chamber Council supports further reductions in import duties so that local businesses can lower their costs in order to attract more local customers. This can only be achieved if the size and scope of Government is reduced and initiatives such as privatization and rationalization of the public service is achieved. 

“The 2% reduction in import duties is a step in the right direction, however, more should be and can be done for all businesses but especially for small to medium sized enterprises which are the key to stimulating economic growth and creating jobs,” said President Johann Moxam. “The cost of doing business has increased significantly with many fees increasing by more than 100% over the past decade, including work permits and licensing fees. Many businesses have had to absorb these massive fee increases in order to remain competitive in the local and international marketplace. The Chamber challenges Government to press ahead with the rationalization of the public sector in transparent manner and to identify areas of Government that are suitable for privatization as soon as possible and we look forward to the receipt of the Ernst & Young report this month. It is also important that the Government acts promptly on the Ernst and Young’s recommendations. A comprehensive action plan and a competent and professional implementation team is crucial and should be established and given specific timelines to implement viable changes that will improve Government efficiencies and lead to lower costs that can be passed on to all residents and businesses,” he said.

In February 2014, the Council submitted a list of proposals to the Minister of Commerce which would run for an 18-month period from 1st July 2014 for licensed micro and small businesses as classified by the Department of Commerce and Investment. The proposals were intended to provide small businesses with some much needed relief.

The proposals included:

FINANCIAL

• 30% reduction in trade and business licensing fees;
• 7.5% off the current import duty tax;
• 25% concession on custom duties for new small business start-ups;
• 30% concession on customs duties for small businesses that introduce alternative energy solutions;
• 25% reduction in all work permit fees and a 50% discount on permit fees for part time staff (20 hours per week);
• 25% reduction in work permit fees for managerial level positions.

TECHNICAL

• Free access to training courses through the Chamber of Commerce Professional Development and Training Centre during the period. The Cayman Islands Government would reimburse the Chamber for the courses at reduced Chamber course rates. The Department of Commerce and Investment would work with the Chamber to identify special courses that can be designed to meet the needs of small businesses.
• Access to two one hour small business consulting/ advisory sessions with a legal, accounting or other professionals during the period.
• Development of a small business mentoring programme that would match up small businesses with larger businesses who would be willing to offer advice and assistance on business related matters addressing all aspects of a business.

The Council maintains that these proposals along with the development of a national small business strategy would help to stimulate small business growth in emerging industry sectors and would establish some measurable targets.