I recently set up a small business that involves buying and selling, meaning that I am buying from overseas to sell to the local market. Setting up a business in such trying times could be very risky and frustrating. However, having set up shop, I decided to make my first order/importation of commercial goods.
I thought after setting up business and working out the necessary logistics, such as sourcing products, pricing, and securing potential customers among other things, were the most difficult tasks. Little did I know, the worst was yet to come, and by that, I mean interfacing with the Customs Department.
Never in my wildest dreams did I conceive that it would have taken me almost a week to a clear a consignment of commercial goods with an estimated invoice value of US$5000. First, I had to get my invoice accepted by the valuation section. That took me two to three days as the supervisor could not be found for almost the entire first day to accept my invoice. Then my invoice price was compared to prices on the Internet and according to the officer, I had to show proof of payment. So apparently, if my prices were the same as the Internet no proof of payment will be required and thirdly, the value was increased as I could not provide proof given the fact that I was allowed 30 days in which to pay which meant my transaction was not completed. Telephone numbers were provided to call the supplier, but sadly the department did not possess a magic jack. With all the back and forth it was the easiest thing just to accept the increase as my customers were in need of the merchandise.
Now, it is not my fault that the supervisor could not be found and why such a small invoice value has to go to a supervisor. How on God’s earth you are telling me that my invoice price is lower than Internet prices when the Internet and I are trying to sell the same items, only difference is what you see online has other cost built into the price, whereas my shipment has not been priced as yet. Also, I am able to negotiate prices and payment terms directly with my supplier, a fact that the Customs Department does not seem to consider.
In the year 2013, a business should not have to wait until goods arrive at the Customs to determine whether or not it is feasible to make a profit. It is not right to have priced your goods before hand and when they arrive at the Customs they are increased because they are not in sync with the Internet. The Customs Department needs to come out of the dark days and embrace the light of the global village in which we exist. Your customer service is very poor, your officers seem to lack training, and worst of all, they seem not to have a clue as to how business is conducted in these modern times. Your system could only drive investors to other shores.
Having experienced what I did, it was not surprising to hear from a number of businessmen that they have in fact imported far less in the past few years, which is not only due to the recession, but also mostly to the Customs Department. The Customs Department needs to encourage trade and not retard it. The inefficiency of the Customs can only further help to worsen the state of the economy. I do hope that the arm of government with responsibility for the Customs Department does something soon before they drive what left of small business out of business.
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected].
This is an issue not just for business owners, but for individuals who try to order merchandise online, as a means to reduce the cost. But the import duties that are placed on small and cheap items is just ridiculous. I recently ordered some parts for my cell phone that came up to just under US$ 30.00 ($81.00), but to my amazement, I was charged $116 to clear them. How can the duties be more than the actual price for the merchandise? If they continue on this path, no one would import anything into this country.
I agree with the writer having experienced the same treatment. The Customs simply ignores the invoice and relies on web site pricing without assessing or determining whether the prices are whole sale or retail, whether shipping is included or if the website is credible or not. The Customs assumes that whatever is on the internet is true, reliable, and sound. Their searches are limited and they always assume that that the importer is cheating
A very important point you made that is worth noting is that of the price on the internet, that is their selling price whereas you having to buy at that price would have to add your overheads to arrive at your selling price. Could the customs be responsible for the ridiculously high cost of goods?
I, too, had that experience with a small service business some years ago. It was a devastating, personal experience with not as much to do with what I eventually paid to Customs but more to do with staff attitudes and willful ‘bullying’.
FRUSTRATED, has it as yet occurred to you that the stage is being set for a little ‘butter-hand’ also known as a bribe? Your experience would become magically easier if you were to play. Little businesses often grow into big businesses and so, the beat goes on.
This article is much needed and really speaks for not only the business person but the pesonal consumer as well. Modern trcnology allows a housewife , for example, to bring in a set of dishes which Cusoms would treat like a big commercial order. They do not differentate between personal effects and commercial. And the problem is, at least the business person could claim back the VAT , but the direct consmer cannot. I have also observed that the company with which I ship my orders for small personal items no longer requests an invoice from me. When I inquired about this, I was told that Cusoms no longer requests it! It appears, that the customs officers have decided that they will determine the value of the item!
I am glad to see that others are concerned about the archaic methods and laws that still operate in SVG. There are many more old laws that need to be brought in line with whats happening globally. The government needs to bring the law out of the 1900s.
On the issue of the custom officers, they probably havent shopped on the internet. I have and I dont think I will continue, because a product can cost $20, but shipping can be $20 or more. Then one has to use US dollars to purchase all products on the Internet. I believe shopping on the Internet is a total rip-off, especially if the product is coming from the US. Incidentally if you live in the US then delivery is free isnt that something.
Why doesnt the government let the consumers decide if they would pay for the product, instead of trying to set the price for the seller?
The Customs Officials do not understand the basics of supply and demand.
In order for a customer to buy the price must be right. The supplier (if he / she is good at their job) will find items that have a whole sale price that is profitable; that is they can buy / ship / import and sell with enough of a margin to make it worth their while.
Retailers usually buy in bulk, and have suppliers that offer special discounts etc.
The majority Customs Officers seem to have no understanding of basic business principles! Also they seem to be under the impression that every single importer is out to avoid paying duties and associated taxes.
Checking to see the cost of an item on the internet is ridiculous! You will only see the recommended retail price and not the wholesale price afforded to retailers!
I fully appreciate that their are some who would try and cheat the system, but an invoice is an invoice! If I can buy a product at 10c and the recommended retail price is 50c this make me a good business person, not a tax dodger!
You are not the only one to voice this frustration. Earlier this year the Customs Department invited the Tourism Sector to a consultation meeting. Your points were shared by almost every member of the SVG Hotel and Tourism Association in attendance. Assurances were offered that things would change. It would appear that they have not!
I had a retail arm of my business, which I have subsequently closed; challenges with importation of goods being a primary factor in the decision.
The Government should note that if local retail is limited it will limit income to the public purse. People who want to purchase items will still buy, but the money will be spent with overseas retailers, and come back in suitcases. Indigenous businesses will continue to fail, leading to higher unemployment, and less money paid in to our system through VAT, duties, NIS etc…
Commerce is the life blood of our economy, public servants should understand that they are paid from taxes paid by the public. Therefore they need to understand that if they do not serve the us well we will have nothing left with which to pay them!
Ease of doing business in SVG graded a big fat “F”. We shouldn’t wonder why investors are barely trickling in. The bureaucracy is disconnected from its various parts as well as disconnected from how things are really done in a modern economy and society. It has no clue. It has no appreciation for the role it is supposed to play in strengthening the economy and the society. Something as elementary as the need for quick response time seems to be a mystery to it. Unfortunately there doesn’t seem to be much curiosity as to how its practices can improve. The bureaucracy is well on the way to single-handedly killing all business activity in this country, with lots of help from the political class of course.
My friend welcome to SVG, the place of the corrupt. The country doesn’t follow the OECS common import tariff, it’s a wild west down there and I am sorry to say that it’s not even close to being the other issue. Politics play a big part of who can import things in the country, for instance i went back home to vincy after 12 years away and wanted to bring my things home with me, which under vincy law were suppose to be duty free, and I went and ask customs about it and they refused to follow the law and wanted to charge me thousands to import my stuff, so I just left and went back to North America.
And the main reason why most people get the run around is that politics as I said play a big part in who can import goods easily in the country, I was made painfully aware of that fact when my cousin, who is a supporter of the ULP told me that anything that I want he can import for me in the country duty free.
I couldn’t believe what he said, but the next day he showed me an official ministry letter for duty free concession, and he doesn’t even have or intend to start a business, it was just politics. If you are somebody in your family don’t have some connection to somebody in the party then good luck getting your stuff through on time and at a fair quote. Thanks for expressing these views, it’s not just NDP people that are victimized in SVG it’s anyone who isn’t ULP.
In an age where a global market is readily accessible; where sensible businesspersons the world over, try to bargain with customers to ensure a sale; where prices can fluctuate at a moments notice due to stock market tides in the said global market.; it is sad to here of such inefficiencies taking place. It does suggest a need for changing policies and procedures.
Purchasing goods on terms is age old, why then must you be penalized if you only have a proforma invoice? Through negotiobs (sometimes the promise of recurrent business) a seller may offer a discount not available online to all other purchasers. Why must such a small value of goods require such high level authorization that a missing supervisor brings trading to a halt.
Hopefully this was a rare occurrence. Though a rare occurrence would raise other questions. I trust some improvement is seen soon.
This government does not get it. The fall off in monies collected from import duties etc is directly linked to the hassle and effort by customs to squeeze AS MUCH AS POSSIBLE from importers ( or most of them)
A very timely article
Some of the bigger importers have even bigger problems, the customs taking weeks to clear containers. Always assuming that the importer is a crook even if proper invoices and proof of payment is supplied.
Pilfering at any opportunity is also rife at the customs sheds. Once a container is opened don’t turn your back on it for a moment, someone will be in it like a rat up a drain pipe.
A friend of mine imported two 40′ containers full of items purchased in an auction sale in the US. He had all the paperwork including auction catalogues and detailed invoices and receipts.
The customs office would not accept the low prices of items, which were all used, nothing new, they then valued the goods at their valuation, which was three times as much as it should of been at the cost prices.
He never imported again, that killed a new business stone dead on its first transaction.
We know that as much money as possible is needed for the new airport, but this overpricing behaviour is stifling business and results ultimately in less revenue rather than more.
I have been told that the customs department and officers are on a commission, the more they charge, the more they get. Can any one confirm if this is true, or not?
Can any inform me as to hat the law says about import duties? I have always been concerned by the issue of the invoice price vs item value. Does the law state that duties are to be paid on the INVOICED purchase price or is it to be paid on the supposed VALUE of the item?
The answer to this question might give some insight into the practices at the Customs, especially since they often try to push the value higher. The answer may also give importers a better footing to stand on. Knowledge is power.
While we on the Customs’ practices. Can anyone explain why freight is taken into the calculation prices? For instance, a car comes in and freight is I few thousand dollars, duty is calculated on that too. I’m not a student of business so I dont get this. Why not tax the actual vehicle cost?
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