NASSAU, BAHAMAS – The Bahamas has been listed as number one in the world for countries with the highest tariff rates – something that could be slashed with accession to the World Trade Organization.
In a ranking released yesterday in the quarterly finance publication World Finance site, The Bahamas leads a listing of the top five countries with the highest trade tariffs.
“The Caribbean’s wealthiest country also imposes the world’s highest tariffs on imported items,” read the report.
The report continued, “Despite relying on imports – the country has a trade deficit of $7.781bn – the Bahamian Government raises 60 per cent of its total revenue from import taxes.
“While the basic tariff rate is levied at 35 per cent, a growing list of tax-free items has reduced the average tax rate to 18.56 per cent.
“It’s a stark contrast to the Bahamas’ tax rates; the country imposes no income tax, corporate tax, capital gains tax or wealth tax.
“Along with the tariffs, the island, which is located just off the coast of Miami, relies on tourism, mainly from the US, to drive its economy.”
While high tariff rates are set as a way to encourage the development of local industry and lessen imports, the WTO sees customs duties and other import tariffs as barriers to trade that could impede the free flow of goods and commerce across borders.
The multilateral body requires an average tariff rate of 15 per cent for membership accession.
It is expected that the government will lose anywhere from $100 million to $200 million in import duties as a result of joining the WTO, even with certain categories of items already moved over into the excise tax category.
Officials are still in the process of negotiating the best way forward without injuring Bahamian manufacturers, while still gaining access to benefits associated with accession to the WTO.