CUSTOMS TARIFF AMENDMENT (No. 3) ACT 2018

Mr. Speaker,

Honourable Members are requested now to give consideration to the Bill entitled ‘Customs Tariff Amendment (No. 3) Act 2018’.

Mr. Speaker,

The Bill proposes to amend the Customs Tariff Act 1970 (“the principal Act”) with measures that include—

1. amendment of CPC 4229 in the Fifth Schedule to the principal Act (end-use duty concession for goods for local commercial manufacturing); and
2. amendment of the Fifth Schedule to the principal Act by inserting new CPC 4232 (end-use duty relief for goods for seniors’ housing).

Mr. Speaker,

I must highlight that following further consideration of the scope and certification of the new CPC 4232, I will be proposing certain amendments on the floor, which I will outline shortly.

Mr. Speaker,

I now turn to the measures of the Bill that amend Fifth Schedule CPC 4229.

Honourable members may recall that CPC 4229 was inserted in the Fifth Schedule of the principal Act by the Customs Tariff Amendment Act 2017.  CPC 4229 was designed to give the Minister of Finance greater flexibility in promoting manufacturing undertakings carried on in Bermuda especially where the undertaking is likely to create new jobs and be of benefit to the general economy of Bermuda. 

Mr. Speaker,

Currently the low 5% concessionary rate under CPC 4229 is available in respect of all goods, provided that such goods are imported for and used only in the local commercial manufacture of goods by an approved business, and provided further that the goods must be incorporated in locally manufactured goods.

Mr. Speaker,

As it stands, CPC 4229 unhelpfully affords the Minister no discretion to restrict the scope of qualifying goods in respect of any particular approved business.

In order to address this issue, the Bill provides the Minister of Finance with discretion to determine the scope of qualifying goods in any approved business notice made by him under CPC 4229.      This will give the Minister of Finance better flexibility in the administration of the concessionary 5% duty rate.

Mr. Speaker,

I will now progress to the measures of the Bill that insert new CPC 4232 in the Fifth Schedule to the principal Act.

Honourable Members will recall that on 19th July 2018, the Premier and former Minister of Finance gave a National Address to the people of Bermuda in which the Government promised to take steps to support seniors ageing at home.  One of the measures proposed by Government is the creation of a new duty relief for goods for improvement projects to seniors’ housing.  The proposed duty relief is intended to encourage installation of fittings and fixtures that will enhance seniors’ mobility, safety and comfort while at home.  It is intended that the duty exemption should also apply to existing and new residential care homes, as they also play an important part in Bermuda’s healthcare system.

Mr. Speaker,

In order to ensure adequate control of the proposed duty relief, it is proposed that the Department of Ageing and Disability Services (ADS) should certify the particular goods that will qualify for the duty relief in any given case.  It is intended that the ADS certificate should then be presented to Customs in support of any application for duty relief.  Further conditions of the relief will specify that qualifying goods must be installed only on the premises specified in the ADS certificate, and that qualifying goods must be used for the purposes of enhancing seniors’ mobility, safety and comfort.

While the new CPC 4232 benefits seniors, we will propose an amendment to allow the benefit of this relief to extend to disabled persons as well, whether they live at home or in a residential care home and to provide published guidelines that the Director of the Department of Ageing and Disability Services will follow in certifying goods as eligible for the relief.

Thank you, Mr. Speaker.

CLAUSE BY CLAUSE NOTES

This Bill seeks to amend the Customs Tariff Act 1970 (the “principal Act”).

Clause 1 is the citation.

Clause 2 amends CPC 4229 in the Fifth Schedule to the principal Act (goods for local commercial manufacturing) to provide that the discounted duty rate of 5% will not apply to all goods, but to goods of such description or quantity as may be approved by the Minister in the relevant approved business notice made under this CPC in accordance with policy guidelines issued and published by the Minister.

Clause 3 amends the Fifth Schedule to the principal Act by inserting CPC 4232 – originally it was proposed to provide duty exemption in relation to goods for seniors’ only. However after further consideration it is proposed to allow the benefit of this relief to extend to disabled persons as well. There I propose the following amendment to CPC, which has been handed out:

HON. CURTIS DICKINSON, TO MOVE:

I  MOVE that the Bill be amended:

In Clause 3 of the Bill by repealing and replacing the table for “CPC 4232” with following:

“

”.