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Taxing the full amount over duty-free threshold is unfair

Published:Monday | April 15, 2024 | 12:05 AM


Jamaica Customs Agency’s recent clarification on duty calculations for imports exceeding the de minimis threshold of US$100 has sparked debate and criticism. The policy states that all imports surpassing this threshold will be subject to duty charges based on the full declared value of the shipment, rather than just the excess amount over the threshold.

This approach, according to many, is unjust and counterproductive.

De minimis thresholds are established to streamline customs procedures and facilitate trade by exempting low-value shipments from duties and taxes. This encourages cross-border commerce, supports small businesses, and reduces administrative burdens. However, Jamaica’s decision to tax the full declared value of shipments exceeding US$100 directly contradicts the spirit of de minimis thresholds.

In numerous countries, including the United States, Canada, and members of the European Union, duty charges are applied solely to the value exceeding the threshold. For instance, in the United States, the de minimis threshold for duty-free imports is set at $800. Any shipments valued below this threshold are exempt from duties, while those exceeding it are subject to duties only on the portion over $800.

Taxing the full declared value of shipments will disproportionately affect small businesses and consumers. For example, if someone imports goods valued at $101, under the policy they would be taxed on the entire $101, significantly increasing the cost of the imported goods.

Further, the World Trade Organization encourages member countries to establish reasonable de minimis thresholds to facilitate trade. Taxing the full declared value of shipments runs counter to these principles and may hinder Jamaica’s ability to effectively engage in international trade.

Critics argue that Jamaica Customs Agency’s insistence on taxing the full declared value of shipments reflects a short-sighted approach to revenue generation. Instead of fostering a conducive environment for trade and economic growth, this policy threatens to discourage imports and undermine consumer welfare.

Jamaica’s Customs policy of taxing the full declared value of shipments exceeding the de minimis threshold of US$100 is not only unjust, but also counterproductive. By diverging from international best practices and standards, Jamaica risks hampering its economic development and undermining trade facilitation efforts. It is imperative for the authorities to reconsider this policy and adopt a more equitable and pragmatic approach that aligns with global norms and promotes sustainable economic growth.


Youth Advocate