Understanding Bahamas Tariffs
What Are Bahamas Tariffs?
The Bahamas Tariffs are a set of taxes placed on items imported into The Bahamas. In addition to being among the greatest sources of income for the government of The Bahamas, they also act as a form of protection for some local businesses.
Bahamas Tariffs rates range from nothing to 220%. Outside of that amount, there are also other import taxes and fees such as Value Added Tax and Environmental Levies.
How The Bahamas Tariffs Are Organized?
The Bahamas Tariffs are organized in a Tariff Schedule which outlines the different categories of items that can be imported. Each category has an associated rate and other related information. In The Bahamas, the Tariff Schedule is based on the Harmonized System. The Harmonized System is used by other countries to make it easier to import and export goods between countries.
Developed by The World Customs Organization (WCO), the Harmonized System uses a set of numbers to systematically classify items.
If you were to take a look at The Bahamas’ Tariff Schedule, you’d see that it’s divided into sections, chapters, headings, and subheadings.
The chapter, heading, and subheading numbers combine to form a tariff code which is used to classify a particular item. For example, the tariff code for a particular type of computer is 8471.4100. In this example, the first two digits of the tariff code represent the chapter, the next two digits represent the heading, and the remaining digits represent the subheading.
For laptops, the tariff code is 8471.3000. The first part of the tariff code remains the same because it’s still a computer, but the subheading is different to reflect that it’s a more specific type of computer.
Sections group similar chapters together. For instance, section one of the Bahamas Tariff Schedule is entitled Live Animals; Animal Products. Within it are chapters 1 - 5, which represent live animals, edible meat, fish, dairy, etc.
Missing From The Bahamas Tariff Schedule
When reading the Tariff Schedule, it’s important to note that there is some information missing from it that can have an impact on the cost of imported items. Such information includes excise rates and environmental levies.
Excise Rates
Excise Rates are similar to Tariff Rates in that they are a tax applied to imported items. They are listed in The Excise Act and The Bahamas Tariff Schedule indicates that there is an excise rate for an item by placing two asterisks next to the tariff code.
When an asterisk is next to the tariff code, the rate in the tariff schedule is usually Free, but the excise rate for the same code in the Excise Act has a rate.
The separation of Excise and Tariff rates is simply for presentation purposes. The excise rates are usually higher and by placing them in another document it gives the country the appearance of having low tariff rates.
Environmental Levies
Environmental levies are another fee that impacts the cost of imports into The Bahamas. Unlike the excise rates, The Bahamas Tariff Schedule doesn’t give any clues that a particular tariff code has a corresponding environmental levy.
The environmental levies are listed in the Customs Management Act using tariff codes. To find out if a tariff code has an environmental levy associated with it, you’d search for that tariff code in the list of environmental levies listed in the Customs Management Act.
In most cases, environmental levies are a fixed amount ranging from $5 to $500, but there are instances where it’s a percentage of the landed cost of an item.
How Do The Bahamas Tariffs Protect Local Businesses?
When someone considers importing an item, one of the first questions they may ask themselves is whether the product is worth importing. Whether a product is worth importing depends on the tariff rate for the product and the price of the product at a local business.
If the item is much cheaper to import than buy at a local business the buyer will most likely import it. On the other hand, if the item costs about the same or is cheaper to buy locally, the buyer will do that.
Given this reality, where there are local businesses that manufacture a certain product, the government of The Bahamas may place high tariff rates on that category of product to encourage individuals to purchase the item locally rather than import it.
This in turn protects local businesses from foreign competition.
A great example of The Bahamas tariffs protecting local businesses is water. The tariff rate for water is 100%. That means if a person were to import any type of water, they would pay the same amount in tariffs as they paid for the water.
This is because water is manufactured locally and the government of The Bahamas wants residents to purchase it locally.
Related: Bahamas Tariff Search