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Institute Opposes Latest Anti-Business Tax

9 April 2002

The Importers Institute made a submission to a Parliamentary Select Committee opposing Jim Anderton's latest anti-business initiative: a new tax of $15 million on importers.

From 1 June, importers will have to pay $18 on each shipment, courtesy of the Minister of so-called "Business Development." Mr Anderton facetiously called this new tax a "subsidy reduction" and attempted to justify it by comparing it with fees charged in other countries. We pointed out to the Committee that the New Zealand Customs Service, in consultation with users, implemented an electronic import/export clearance service based on modern technology. This resulted in the current pricing structure of less than $2.00 per document. New Zealand importers already pay a contractor appointed by Customs to operate this simple email exchange system. The fees are much lower than those levied by the Australian and US administrations, because their interactive mainframe terminal systems are older and more costly.

Incidentally, the last government promised that the current email system contract, awarded to a company called ECN without a formal tender, would be put up for open tender after the first twelve months of operation. The current government, however, decided to continue with this arrangement. We invited the Select Committee to investigate this irregularity.

WTO Rules (GATT Article VIII: Fees and Formalities connected with Importation and Exportation) allow the imposition of some customs processing fees provided they are "limited in amount to the approximate cost of services rendered and shall not represent indirect protection to domestic producers or a taxation on imports for fiscal purposes".

Mr Anderton specifically excluded exports from the new tax. This means that the new tax is little more than a backdoor tariff - and, as such, inconsistent with our WTO obligations.

Ends

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