Hike in import and export fees
Customs and biosecurity fees on imports and exports are set to jump about 20 per cent to help fund the first tranche of a new Customs' computer system which it revealed would cost $204 million to build and run until 2021.
The fees are typically passed straight on to importers and exporters by freight firms.
Customs Brokers and Freight Forwarders Association (CBAFF) president Willie van Heusden said that if the new system led to hoped-for efficiencies for its members, they might be barely noticed by businesses amid the flow of international trade.
About $100 billion-worth of goods are imported and exported each year.
However, consumers who purchased any item worth more than $400 direct from overseas would have to pay an "import entry transaction fee" of $46.89, up from $38.07 today, under the proposal put out for consultation by Customs.
A lower threshold applies for some items such as clothes that still attract import duty. Anyone who bought a pair of shoes or a dress costing $240 from an overseas website such as Amazon would be liable to pay GST, duties and Customs and biosecurity fees totalling $106.89 on delivery, for example.
Reports suggest it is "hit and miss" whether such fees are actually levied on individual personal imports.
The proposed fee increases would raise about $100 million over 11 years, meeting just under half the cost of "Tranche 1" of Custom's Joint Border Management System (JBMS).
The Government approved $75m of capital funding for Tranche 1 in the 2011 Budget and awarded IBM the contract to build the system that June.
Despite the $204m capital and operational cost of the system, Customs said Tranche 1 would not, in itself, allow Customs to retire its existing 15 year-old mainframe-based Cusmod computer system.
It would deliver the majority of the benefits of a much-vaunted "Trade Single Window", which will let customs brokers enter all the information they need to submit to border control agencies here and overseas for each consignment just once, electronically.
However, Customs deputy comptroller Robert Lake said a "Tranche 2" of JBMS would be needed to finish the job, decommission Cusmod and introduce sophisticated new intelligence tools, and a business case for that was likely to be ready for consideration by ministers in time for next year's Budget.
Lake said Tranche 2 was also expected to have a capital cost of about $75m.
Van Heusden said Tranche 2 would need to be built and it was disappointing the proposed fee increases only covered Tranche 1. Computer projects such as JBMS were also "notorious" for blowing their budgets, he said.
Despite that, the federation supports the overall project. As well as reducing red tape, JBMS would help Customs and the Primary Industries Ministry better work out which consignments to inspect, reducing unnecessary delays at the border, Van Heusden said.
- © Fairfax NZ News
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