THE IMPACT OF THE CURRENT TAXATION SYSTEM OF IMPORTED GOODS FOR SMALL BUSINESS OWNERS AND FARMERS IN THE CARIBBEAN ISLAND


 


      Caribbean Island also known as West Indies are group of island located in Southeast of Gulf Mexico and Central America, North America and to the North of South America, this island consist of more than 7,000 islets. They have a rich culture and ethnicity, strong history of slavery and colonialism and they are also the center of socio- economic groups like the (CARICOM) or Caribbean Community through which there are also groups of small and medium enterprise development within the community.


      Depending on their businesses but some of their small enterprises is affected largely by the current taxation system of imported goods and services within the island. With the influence of Organization of American States (OAS), World Trade Center (WTC) and United Nations (UN) with the Common External Tariffs (CET) together they have formed a tariff based trade agreement in their business practices where import products of all items are basically assessed and charged 5% to 20%. Duty exempt products are only limited and not charged, the duty products are only allowed to be distributed in duty free shopping and available only from limited locations. Vehicles that are duty exempt is still charged, there are also General Consumption Tax that are charged on various imported goods unless duty tax exempt.


      According to some of small and medium enterprise that domination of the import market especially in duty exempt goods and products in the tourism sectors that is often seen in the hotel and restaurants are affecting their business through competition and many imported products in agricultural, imported food and textile to consumer goods are gaining popularity because of the tax is very accommodating among the Caribbean that makes their products weak and less valued.      


      The problem is not about the scarcity but price according to Dr. Chandra Madramootoo from Guyana Dean of the Faculty of Agriculture at Canada McGill University. He explained that the price of imported commodities including oil, fertilizer and gases additionally the transportation of such goods makes the prices of their agricultural products increase higher but imported foods and other products coming from other countries are somehow considerable in prices that make their products acceptable in the market.


      He also added that this condition makes the Caribbean countries dependent in import products rather than their local products being consumed. The tourism is much more promoted than agriculture and this is why most of their small and medium enterprise could hardly grow. Before, Countries in the Caribbean including Haiti and St. Lucia is sufficient in rice and livestock but today this small business has been largely affected according to Dr. Madramootoo but he has not made much comment about imports. (http://acp-eucourier.info/Soul-searching-in-im.328.0.html).


      Some small and medium enterprise suggested that the current taxation system should be reviewed in order to protect the farmers and small business producers should be re organized and assessed because imported commodities are a threat and taking over their products. The farming sectors are somehow neglected by the government because of this, large parts of the land of the Caribbean has been degraded to farming in fact in Haiti there are almost 50% lost of land for farming as of present times. The small scale enterprise and laborers are being lessened because of this.


      In Jamaica the cost of sugar and banana goes up almost thrice as much this is because of lack of increase in productivity which has been the result of globalization and import products because of the high cost of technology in producing mass amount of their products and the scarcity of lands that they used. The banana industry in Jamaica is still under threats because of the litigation ruling of the World Trade Center (WTC). Small and Medium enterprise of banana and other products in Jamaica has largely decreased its production. They are calling the government for a long term survival strategy not in diversification of products but support in technology.          


      The good news to the importers is that almost all goods are freely imported and accommodated in the Caribbean Islands as long as the products has current licenses it can be allowed, the only exemption of their imports  is the illegal forms of drugs, ammunition, explosives, deadly weapons. Unlicensed motor vehicle is also not allowed. Products who entered in the Caribbean whether import or export are subject to control and inspection, products are regulated by Fair Trading Commission (FTC) and other agencies depending on their countries there are regulatory bodies and law enforcement to act as standard quality controller. This is another system that small business wants to review; it is very easy for import products to enter in the Caribbean Island.


      


       


    



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