Cigarette duty in the Cayman Islands doubled

Cigs

With effect from September 17, the import tax on tobacco products, namely cigarettes, in the Cayman Islands is established to be increased by $2.10 per pack of 20 cigarettes, showing a 100 percent increase in tax, the Premier’s Office made an announcement on September 14.

In accordance with a news release, in line with the increase in duty on cigarettes, the import duty rate on alcohol will be increased as well. The increase will be made up of 30 cents per litre for all alcohol, among them ale, beer, wines, champagne and spirits.

Osbourne Bodden, who is an owner of a liquor store, gas station and fry fish hut in Bodden Town, said that it is a tactical move as taking into account that the cost of living for people is already high, any kind of heavy duties in tobacco and alcohol areas is going to make people’s lives that much more miserable.

Besides the increase in tax on cigarettes and alcohol, the Cayman Islands government will now establish a $100 inspection fee on all cargo containers and a fee of $2 per 100 pounds (or part thereof) on all loose cargo and packages.

Jacques Scott Group Managing Director Peter Dutton said that he knew about a forthcoming increase in tobacco and alcohol tax, but he had no idea what the specific increases would be. He said that he would have to crunch the numbers before he could estimate the potential effects on his business.

The dominant market rate for a 20-cigarettes-pack is nearly $6, together with $2.10 in import tax. Beginning with September 17, the import tax on a pack of 20 cigarettes will be $4.20. If shops pass on the entire tax increase to customers, that means the market rate for a pack of 20 cigarettes will increase to $8.

Meantime, the present price for a carton of 10 packs of 20 cigarettes is nearly US$31 in the airport’s duty-free stores.

The present tax on cigars is 102 percent of the value of the cigars. The tax on chewing tobacco that is sold in packages of nearly 1.3 ounces is $1.49 per pound.

Beer rush 

Contrary to the cigarette tax increase, the hike in tax on alcohol is relatively reasonable. The import tax on ale, beer and cider is up from $1.65 per litre to $1.95 per litre.

But, the more reasonable hike did not stop Cayman Islands retailers from making a run on alcohol products, especially beer, looking to store ahead of September 17.

The tax on table wine is up according to the new import fees from $3.30 to $3.60 per litre; the tax on champagne is up from $10.50 to $10.80 per litre; and the tax on spirits (containing less than 50% alcohol by volume, or 100 proof) is up from $11.55 to $11.85 per litre.

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