Changes in Customs Duty – Tobacco and Vehicles

  • Executive Council agrees changes to customs duty at their meeting on Tuesday, 20 August 2019
  • 8.88% increase in the customs duty on tobacco products to come into effect from 1 October 2019
  • A change in the Customs Duty Tariff for vehicles from value based to a fixed rate based on emissions to come into effect from 1 December 2019

 Increase in duty on tobacco products

Tobacco duty was increased by 5.1% on 1 April 2019. The additional 8.88% increase to come into effect from 1 October meets the World Health Organisation recommended level and is one of the requirements on the United Nations Framework Convention on Tobacco Control. The change will see an extra 18p on a packet of 20 cigarettes with tobacco.

Increasing the level of customs duty applied to tobacco products supports current health promotion and preventative healthcare work on St Helena.

Smoking is the leading risk factor for Non-Communicable Diseases affecting the community. Non-Communicable Diseases (including cancer, heart disease, stroke, lung disease, type two diabetes, and kidney disease) cause most illness, disability and earlier death in the St Helena population. The majority of medical evacuations and a large percentage of overseas referrals are for these types of diseases. This is also a major portion of the Island health budget.

If we reduce the number of people smoking, we help everyone reduce their risk of these major illnesses.

Nearly one in four St Helena adults and nearly half of young adults (future workforce and young/future families) smoke. This is substantially higher than in many countries including the UK and South Africa.

Tobacco Taxation has been shown across the world to be the most effective way to reduce smoking rates over time – it is most effective at reducing the number of youth who start smoking, and at helping smokers who need further reasons, to quit.

The St Helena population health survey data shows that the number of people who ‘seriously wanted to quit’ increased substantially (22% to 38% of smokers) from 2018 – 2019. However these are the people who most want to quit, and it is recognised that for people who are not yet wishing to quit, further measures and support are needed.

Raising tobacco taxation works most effectively in combination with other measures, and the SHG Health Directorate is working with other parts of government and the community to put other evidence-based, effective measures in place, that together will reduce the number of smokers over the coming years and benefit the community. These include strengthening the smoking cessation service, and increasing the help for smokers who have tried to quit but need more help. Legislation changes (for example enforcing plain packaging for tobacco products) are also being developed that will include further measures to protect young people, reduce the number of people starting to smoke, and encourage quitting.

Change in Customs Duty Tariff for Vehicles

From 1 December 2019, the following rates will apply when clearing a vehicle at HM Customs on St Helena:

Emission Bands Tax tariff as % of sales price (old tariff) Tax rate per vehicle (£),

(rates from 1 December 2019)

0g per km 15% £200
1-100g per km 15% £450
101-120g per km 25% £900
121-165g per km 35% £1,260
166-185g per km 40% £1,530
185-200g per km 45% £2,660
> 200g per km 45% £3,500

Motorcycles will also move to a fixed rate of £700 instead of 35%. Customs duty on heavy vehicles such as lorries and plant machinery will remain unchanged and will continue to be charged on value.

This policy change aligns with the ‘Altogether Greener’ goal of St Helena’s 10 Year Plan and the recently approved Climate Change Policy. It also means a fairer system for people importing greener cars as currently importers of lower emission cars usually pay a higher duty than those importing higher emission cars. Moving to a fixed rate model will also lessen the administrative burden for Customs Officers who will no longer have to verify the value of a vehicle to charge the appropriate rate of duty. The rates were based pro-rata on emissions and rated so that customs revenues from vehicles will neither be worse or better of as a result of the changes.

Around 10 cars between 0-100g per km and around 25 cars between 101-120g per km have been imported in the last three years.  The changes will reduce customs duty for cars imported in these bands after 1 December and it is hoped that more people will bring in lower emission cars as a result.

One of the cars which was most recently imported was the Nissan Leaf. Whilst this car is subject to the old rules because it was imported before 1 December 2019, cars imported like this in the future would benefit from the new lowest rate of £200 customs duty.

Low emission cars have been available for more than 10 years and there are second hand vehicles available and affordable to buy which are not high emitting: Euro 3 emission standards were put in place as a minimum emissions benchmark for new cars from 2001 and currently Euro 4 is the minimum standard for cars and vans driving in central London for example.

The type of used cars which are available and are categorised in the lowest two emission bands include the Toyota Prius, Honda Civic Hybrid, and Honda Insight Hybrid. Examples of some new models available on the market include the Nissan Leaf, Renault Zoe, Volkswagen eGolf, BMW I Series, Volkswagen Golf GTE 1.4 and Range Rover Sport 2L petrol Hybrid.

Alongside this proposed change to the customs duty tariff on vehicles, SHG has started to develop a plan to acquire emission testing equipment and work towards specifying an emissions test be undertaken within annual MOTs to track emissions of vehicles on-Island. The information gathered will help inform future changes to the road tax.

#StHelena #CustomsDuty #AltogetherGreener #AltogetherHealthier


21 August 2019

St Helena Government Communications Hub

Telephone: 22470