Jamaica Customs Agency

NAME OF FEATURE | THE GLEANER | FRIDAY, JANUARY 29, 2021 13 NAME OF FEATURE | THE GLEANER | FRIDAY, JANUARY 29, 2021 12 CUSTOMS W EK CUSTOMS W EK J AMAICA HAS experienced many catastrophic events, some of which include tropi- cal storms and hurricanes. These catastrophes have impacted the rev- enue performance of the Jamaica Customs Agency (JCA). The current event, the COVID-19 pandemic, is certainly unprecedented. The dif- ferences between past calamitous events and the current spread of the COVID-19 virus are the magnitude of the effect, which is driven by both demand and supply shocks, and the speed of recovery. As an example, with Tropical Storm Nicole and HurricaneMatthew in October 2016, the JCA’s revenue for that month was approximately $1.2 billion, or 10 per cent below the monthly average for that year, with recovery in the subsequent month. Since the discovery of the delete- rious COVID-19 virus in one corner of the world, the systematic risks endemic to the highly intercon- nected, globalisedworld has thrown governments’ revenue position in disarray; a ‘butterfly effect’ of glo- balisation. The positive year-on-year performance recorded by the JCA during the first quarter of calendar year 2020 of $2.5 billion, or approxi- mately five per cent, was ephemeral as Jamaica, like most other nations globally, was catapulted into an uncharted course by the COVID-19 pandemic. The impact of the COVID- 19 pandemic, and its attendant im- plications for international trade revenue performance, was conspic- uous from as early as April 2020. In the ensuing months, the economy continued to be characterised by heightened uncertainty and the economic contraction deepened. By the end of the second quar- ter of calendar year 2020, the re- duction recorded in the revenue, year on year, was $21.2 billion, or 36 per cent, from $58.6 billion in 2019 to $37.4 billion in 2020. All major tax revenue items – Import Duty, General Consumption Taxes, Special Consumption Taxes and Travel Taxes, recorded a negative performance. Notable, the Travel Tax item, which typically accounted for approximately 10 per cent of the JCA’s tax revenue, declined to a contribution of three per cent. The total Travel Tax revenue collected for the period April to June 2020 was $1.144 billion, down from $5.621 billion recorded for 2019 by $4.476 billion, or 80 per cent. While the unprecedented trend of a negative performance contin- ued into the third quarter, there was hope of an imminent recovery as the year-on-year variance was $15.249 billion, or 25 per cent, de- clining from $61.398 billion in 2019 to $46.149 billion in 2020. From a commodity perspective, some major revenue drivers experienced the most significant decline in years. Reduced importation of finished petroleum products due to domes- tic production, coupled with lower domestic demand, contributed to a lower revenue out-turn from petro- leum products. Similarly, higher levels of unem- ployment, lower disposable income or a lower propensity to consume may have contributed to the sharp reduction in the trade volume of durable consumer goods, inclusive of motor vehicles and household appliances, as well as construction materials. In the case of motor ve- hicles, its trade volume averaged 3,400 units monthly for the cur- rent calendar year in comparison to 4,300 units recorded for 2019. The importation of building materials – steel, building cement, pitch pine wood and other coniferous wood, as well as tiles, continue to be a major contributor to the JCA’s revenue out-turn during the crisis but its performance was not as buoyant as in the pre-COVID-19 period. A significant improvement in the last quarter’s performance, relative to the prior year’s performance, was observed. The revenue recorded for October to December 2020 totalled $52.0 billion. Comparatively, $58.9 billion was recorded for the same quarter of the previous calendar year. A negative performance of $6.9B, or 12%, was therefore recorded, the lowest quarterly variance for calendar year 2020. Aggregately, the annual revenue out-turn recorded for January to December 2020 totalled $192.9 billion and was $41.1 billion, or 18 per cent, below the $234.0 billion re- corded for the same period of 2019. This revenue performance was against a backdrop of travel restric- tions, as well as regional and global decline in container throughput and trade volume. Locally, the number of imported domestic containerised shipments processed totalled 75,741 units and was 5,991, or seven per cent, below the 83,732 processed for 2019. Containerised shipments ex- ported registered a decline of 1,235 units, or eight per cent, to 13,603 in 2020 from 14,838 in 2019. Import volume of 5.330B KG with a nominal value of $693.2 billion was recorded for calendar year 2020. In the previous calendar year, the volume and value of imports were 6.515b KG and $826.701B, respec- tively. Year on year, the volume of imports, therefore, declined by 1.185B KG, or 18 per cent, while the value of imports declined by $133.529 billion or 16 per cent. The Jamaica Customs Agency, as a strategic partner in the global supply change, has sharpened its lens on the evolving needs of its clients to ensure that legitimate cargo gets to the production floor or market timely. At the same time, delay in the collection of the reve- nue is minimised to ensure that the Government of Jamaica (GOJ) has the necessary flow of resources to fund its expenditures, inclusive of those specific to the COVID-19 re- sponse and, importantly, to support the achievement of its macroeco- nomic targets. As a bridge between the private sector and the GOJ, the JCA remains committed to the ef- ficient and effective execution of its mandate to support Jamaica’s sustainable economic recovery. – Contributed by Planning and Research Unit, JCA International trade revenue hit by COVID-19 pandemic Flash Back to Customs Week 2020 The Year We Made History – World Customs Organisation’s Winning Photo for 2018. Customs Meets the Community – Parish Engagements PHOTOS FROM OUR ARCHIVES BEFORE THE PANDEMIC CUSTOMS TIP Items that are being exported temporarily (for example, machinery for repairs) must be registered with the Jamaica Customs Agency at the port of export prior to being exported.