By McPherse Thompson, Assistant Financial News EditorUSED CAR dealers and retail consumers should start benefiting from a new system being employed by the Jamaica Customs Department, as of yesterday, to determine the value of used motor vehicles, parts and equipment imported into the island.
And although the system being implemented under the World Trade Organisation (WTO) Agreement on Customs Valuation for used motor vehicles will mean a drastic cutback in revenue earned by the government from that source, some motor vehicle dealers should breathe a sigh of relief as they have been anxiously waiting for the system to become effective.
However, Kenneth Shaw, president of the Jamaica Used Car Dealers Association, said what while there was now a more equitable system of valuation, he did not see any significant changes in the prices for cars.
He said cost, insurance and freight have been increased over the past few months, and those expenses, coupled with a significant depreciation in the Jamaican dollar to its United States counterpart, have nullified any benefits that would accrue to customers.
According to the Customs Department, under the WTO agreement, the primary method to be used in valuing used motor vehicles, chassis and bodies, used motorcycles and equipment will be the transaction value method. This means that duty will be calculated on the price actually paid or payable for the imported item when sold for export to Jamaica.
Customs said, however, that if any doubt arose as to the correctness of the value of the imported item presented for assessment of duty, its officers would request the necessary documentation to verify the transaction value.
As a result of the new valuation method, said the Customs Department, importers of such items can now submit their invoices along with import entries and the necessary supporting documents for processing.
It said all documents submitted before yesterday, March 10, must be processed under the Brussels Definition of Value System, the old system of valuation that was being used by Customs up to last Sunday.
"Goods for which no documentation has been submitted as at March 9, 2003 and those reporting on or after March 10, 2003 must be processed using the WTO System of Valuation," the Customs Department said.
In addition, Customs said the cost for accessories relating to the vehicle being imported must be included in the value for duty. "In a situation where the goods have been reconditioned, refurbished, modernised or otherwise improved after the sale but prior to importation, the costs, charges and expenses incurred by the buyer for such work must also be included in the value for duty," said the Department.
It said the current method of using various guides and catalogues to value used motor vehicles, chassis and bodies, used motorcycles and equipment will be discontinued. The guides and catalogues will only be used to value goods for which there are no invoices, or where the values have been rejected and Customs has to determine the value for duty. Those guides and catalogues may also be used as a means to verify accuracy of the invoice values presented by importers.
Last year, the Jamaica Used Car Dealers Association pointed out that the catalogue of car prices used by the Customs Department for valuing imported used cars, often gave valuations substantially higher than the purchase price dealers negotiated for many vehicles when they bought them in Japan, for example. Customs duties on those vehicles, computed on valuations of up to US$2,000 more than the actual prices, meant higher mark ups had to be applied to retail customers.
The new valuation system is contained in an amendment to the Customs Act that was passed by the Jamaican Parliament some two years to bring it in line with WTO requirements.
The transaction value for new motor vehicles was implemented more than a year ago. However, Jamaica and other developing countries had requested that special provisions be made to retain the use of minimum values or reference pricing for used vehicles for a limited period under certain conditions agreed to by WTO members.
The request was made against the background that motor vehicle imports has been a major source of revenue for the government and the then implementation of the system would drastically cut into those earnings.
Customs said the new valuation system notwithstanding, it has the right to satisfy itself as to the truth or accuracy of any document or information presented for valuation purposes. And the burden of proof is on the importer to satisfy Customs as to the truth or accuracy of the values.
