ExCo Report – Tuesday 20 August 2019

Executive Council met today, Tuesday 20 August 2019, to discuss three items on the Open Agenda.

Mid-Year Changes to Customs Duty Tariffs

Following a presentation from the Chairman of the Economic Development Committee, the Financial Secretary and the Health Directorate’s Health Promotion and Social Marketing Lead, Council approved an increase in the duty on tobacco products by 8.88% to come into effect from 1 October 2019.

The Health Directorate had proposed to increase the level of customs duty applied to tobacco products by 13.98% in order to work towards meeting the World Health Organisation (WHO) requirements on the convention of Tobacco Control. Since tobacco duty was already increased by 5.1% on 1 April 2019, a further increase of 8.88% was proposed and accepted by Council to come into place on 1 October 2019. This would see an extra 18p on a packet of 20 cigarettes with tobacco.

The potential health benefits that could result if fewer people smoked tobacco were noted and Members recognised that higher prices might be a deterrent to young people who might otherwise start smoking.

The agreed increase in duty supports St Helena’s current Health Strategy goals to reduce tobacco consumption – a major factor in the number of chronic disease cases on the Island and a major healthcare cost.

Members noted that this initiative is just one part of the wider strategy to reduce smoking on the Island and were pleased that other measures by the Health Directorate, such as the cessation service, has seen a decrease in the number of smokers since last year. Future planned legislative changes such as plain packaging and getting rid of tobacco at point of sales will also help long term smokers move towards quitting.

Council felt strongly that the increase in customs duty on tobacco products was a great support to current health promotion and preventative healthcare work and measures such as these to change behaviour is very important to the future of the health of the St Helena community.

Under this item, Members also approved a change in the Customs Duty Tariff for vehicles from value based to a fixed rate based on emissions to support the policy on reducing carbon emissions, to come into effect from 1 December 2019.

The Chief Economist provided background to the proposal highlighting that the suggested changes had arose due to two issues:

  • Importers of low emission cars currently usually pay a higher duty than those importing higher emission cars. This doesn’t strictly support a greener St Helena as per the Altogether Greener goal in the 10 Year Plan and Climate Change Policy
  • The current system is an administrative burden for Customs Officers who must verify the value of a vehicle and charge appropriate duty.

The proposals were to change the rates applied (e.g. 15%) to a fixed fee (e.g. £200) as per the table below:

Emission Bands

Tax tariff as % of sales price (existing tariff)

Tax rate per vehicle (£), (rates as per 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

The Financial Secretary also explained that alongside this proposed change, work is starting to develop a test for CO2 emissions and particulates of vehicles already on the Island and plans will be made to use these as a basis for road tax going forward.

Council noted that the proposed change was to encourage the importation of low emission cars which would positively contribute to a greener St Helena. There were concerns that this change might make cars unaffordable for some people but there was assurance that low emission cars had been on the market for over 10 years and good second hand (as well as new) models are now available to purchase. Members recognised that protecting the environment was important and a positive step forward in the Island’s Climate Change Policy as well as making the system fairer for car importers.

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

A detailed press release on the changes to Customs Duty Tariffs will be issued shortly.

Draft Legislative Programme

Council discussed the current draft Legislative Programme presented by the Acting Attorney General. It was noted that there was a mismatch in what was being produced by Council Committees and what was required by Chambers to draft legislation.

It was agreed that Chambers should issue to Council Committees a revised set of instructions to underpin legislative drafting.

This item would be brought back to Executive Council once a revised set of instructions had been received from Chambers.

High Knoll Fort lease to Saint Helena National Trust

Under the third item, Executive Council approved the Lease of High Knoll Fort to the Saint Helena National Trust (SHNT) along with the Land Registry Parcel Number HTH 1386 surrounding the Fort.

The Chief Secretary recognised that this issue had been circulating for some time and Members agreed that it should be progressed.

Leasing the Fort to the SHNT would mean that the Trust could apply for funding for this heritage site from outside donors. The additional land would also enable them to manage and preserve the property more efficiently.

Members saw this decision as a positive opportunity for the Trust to preserve one of the seven wonders of St Helena.

The AG’s Chambers would ensure the lease is progressed quickly.

The meeting ended at 12.55pm.

ExCo

20 August 2019

St Helena Government Communications Hub

Telephone: 22470
Email: kimberley.peters@sainthelena.gov.sh