“It was meant for a time, it was not meant to be indefinite,” Premier and Minister for Finance Dr. the Hon. D. Orlando Smith said as he disclosed plans to abrogate the duty discount that was offered to merchants as a cost lowering mechanism.
The break was given to merchants in 2013 as a means of making it more affordable to shop locally. The initiative involved the lowering of the cost of goods by levying duty on Freight on Board (FOB) costs on all imported goods; as opposed to levying duty on cost, insurance and freight as was the previous practice.
However, following the duty break some resident argued that the drawback from the freight initiative was not being seen and that shopping overseas still seemed like the most viable option. The complaint was made to the Premier at a public forum, but there is no clear indication as to whether this situation caused the revoking of the duty-break.
In explaining the decision at a press conference Hon. Smith said that the duty-break was a direct response to presentations that were made by merchants and that since then much as changed:
“When we made the decision it was largely because representation was made by merchants who were saying that they could not adequately compete with St Thomas prices or Puerto Rico prices because of the cost of freight. That was one of the major reasons why that was done, and of course this would affect the prices in the stores,” Hon. Smith said.
The Premier further explained that since that time Government has been making a lot of investments in the country in terms of building the infrastructure, and that the merchants will experience savings in other ways.