Ministry of Finance and Customs Department Publish Details of Transitional Bonded Warehouses for VAT
|Authored by:||Ministry of Finance|
|Source:||Ministry of Finance|
|Date:||September 23, 2014|
Details of the transitional warehousing arrangements to allow VAT registered businesses to take advantage of the reduction in Customs duties that take effect on January 1st 2015 were released on the Ministry of Finance’s website today. The arrangements will be managed by the Customs Department, and may require qualifying importers to post a financial bond.
With the bond in place, during the months of November and December, these VAT registrants will be allowed to import items targeted for duty savings without having to pay the taxes up front. Business will have to all report on sales of inventories made before December 31st and pay duty on sold items at the current rates that are in effect. Bonded items which remain in inventory after December 31st will benefit from the lower rates taking effect on January 1st 2015. Remaining stocks will also be subject to VAT. Merchants have until February 28 2015, to pay both the duty and VAT.
Customs Department has established rigid accounting procedures for the virtual warehouses. Firms will have to use BICA licensed external accounts to certify changes in their stocks. The inventories will also be subject to random inspection by Customs.
A spokesperson for the Ministry of Finance acknowledged that “the two months period for qualifying stocks is less than what most businesses would want.” However, they added that the managed timeframe was intended to contain Customs’ administrative costs and minimize risks for fraudulent loss of government revenues, while still allowing consumers to benefit early on from the duty reductions.
Companies wishing to participate in the virtual warehousing arrangements will have to apply to the Customs Department by October 15.