12 April 2024
After a review of customs and excise duty tariffs as part of the 2024/25 Budget, new regulations were approved by Executive Council on Wednesday 27 March 2024.
The Customs and Excise (Tariffs and Exemptions) (Amendment) Regulations 2024 came into effect on 01 April 2024, and can be found online at www.sainthelena.gov.sh/news/government-gazettes/.
The new regulations made a number of changes to the levels of duty applied to certain goods.
As in prior years, the government has increased the rate of import duty on alcohol and tobacco duty. The following increases to duty on tobacco and alcohol have been applied, effective from 1 April 2024:
- Tobacco taxes have risen by a total of 2.1%.
- Alcohol taxes have risen by a total of 1.1%.
These increases are designed to discourage people from smoking and drinking, which can be harmful to their health. This aligns with the government’s overall policy objective and plan to improve public health.
A specific import duty has also been introduced on beers and ciders that contain no more than 0.5% alcohol. This is to avoid taxing drinks that are branded as “alcohol-free”, but which may contain a tiny amount of alcohol, as though they were regular strength alcoholic drinks. These “alcohol-free” drinks will still be subject to import duty at 20% of their value.
On 29 September 2023, in an effort to address problem drinking and promote tax neutrality, the Executive Council increased duty rates on locally produced alcohol. This resulted in higher taxes on local spirits containing more than 22% alcohol (up to £10.30 per litre) and duty being imposed on all other locally manufactured alcoholic beverages for the first time (at a rate of £3.66 per litre). The government remains committed to better aligning the tax status of locally produced alcohol with that of imported alcohol, and is committed to applying duty to local liquor at half the rate that applies to imported alcohol by the end of 2026.
In response to feedback from local businesses, however, these increases will now be implemented gradually. From 1 April 2024, the old duty rate for locally produced spirits with an alcohol content above 22% was reinstated and duty on all locally produced alcohol was removed. Duty to locally produced alcohol will now be progressively applied, with the first increase anticipated for 1 October 2024. The rates will then increase each year in October until a rate equivalent of half the duty applying to imported alcohol products has been reached.
The rate of import duty on buses with 10 or more seats, and certain heavy vehicles and equipment, has been reduced to 5%. Under the Customs and Excise Ordinance 1999, the headline rate of import duty is 20%, which is a basic rate of inflation before influencing factors have been removed.
Prior to this change, heavy vehicles and equipment such as buses, lorries, fire trucks, cranes and concrete mixers were subject to import duty at a rate of 35%, with a 45% rate applied to certain other vehicles.
We recognised that the high cost of importing capital equipment was hampering economic development. This resulted in the decision to reduce the duty rate to 5% on all vehicles and heavy machinery that are not currently otherwise covered by the carbon emissions based vehicle import charge scheme.
This change aims to make it easier for businesses to get the equipment they need to help them grow and succeed.
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