Import fees may rise to fund JBMS

Customs may increase an administration fee on imports to pay for a new computer system expected to cost about $120 million.

The Government is expected to approve the development of the Joint Border Management System (JBMS) in this month's Budget.

Importers pay an import entry transaction fee at a flat rate of $24.75 for every consignment they import worth more than $1000.

The fee, originally set at $18, was introduced in 2002 to cover the cost of improvements to Customs' clearance service.

Customs indicated last month that it would not raise the fee to pay for JBMS, but a spokesman says that was based on incorrect information. It has discussed raising the fee and the biosecurity risk screening levy with stakeholders as a "possible option in the future" to pay for the new computer system.

Import transaction fees raised $23.6m last year. If they were to be used to fully fund JBMS over five years, the fee would have to roughly double.

A Customs spokesman says the fees would only be raised once the system was operational and delivering benefits, which is likely to be in two or three years.

Different rates might be set for air and sea cargo.

Customs is separately proposing to extend import transaction fees to all imports worth between $400 and $1000 from July. The fees will also apply to some lower-value consignments that attract import duty such as clothing costing more than $225.

The change will mean import transaction fees will apply to thousands of consumer purchases, for example from online shopping sites, that had previously been exempted.

At today's fee level, lowering the exemption threshold is expected to raise an extra $1.5m a year.

Customs Minister Maurice Williamson told The Dominion Post JBMS would have big benefits for the industry and the Government could not put such "massive" systems in place without recovering some of the costs.

JBMS would replace Customs' 13 year-old Cusmod computer system, used to collect tariffs, and would be shared with the Agriculture and Forestry Ministry's Quarantine Service, replacing its 14-year-old Quantum software system.

A Customs' briefing paper last year said about $100m would be required from Customs, with a further $20m for the MAF component. Customs said in December that it could issue a tender this month, if funding was approved.

Customs Brokers and Freight Forwarders Federation president Willie van Heusden says JBMS – which will cut red tape for the industry – needs to be paid for.

He is confident Customs will not raise import transaction fees to such an extent that they impede trade.

- © Fairfax NZ News