The Caribbean Court of Justice (CCJ) yesterday ruled in favour of the Barbados government in relation to the tax attracted by imported cement products, finding that the regional cement manufacturers had several years’ notice that the nation would be reverting to the regional tariff of 5%.
This ruling was made with regard to the consolidated matters of Trinidad Cement Limited and Arawak Cement Limited vs. The State of Barbados, and Rock Hard Cement Limited vs. The State of Barbados and The Caribbean Community (CARICOM).
A release from the CCJ pointed out that in 2001, CARICOM’s Council for Trade and Economic Development (COTED) granted Barbados an exemption from the regional Common External Tariff (CET) of 0-5%, allowing the State to apply taxes of 60% to categories of cement described as ‘other hydraulic cement’. It explained that the tariff is intended to offer goods produced and distributed in the region an advantage over imported ones.
However, it was noted that in 2015, Barbados returned to the CET and applied a 5% tax on the ‘other hydraulic cement’ imported by Rock Hard Cement Limited, which comes from Portugal and Turkey.
The court ruled that although COTED allowed a Member state to charge taxes higher than the regional tariff on the import of goods from outside the region, there was no need for the State to obtain approval to revert to the standard. Furthermore, because the regional cement manufacturers who brought the lawsuit had several years notice of Barbados’ intention to revert to the regional tariff, they could not succeed in their action.
The court had noted that reasonable notice ensures that regional businesses enjoy transparency, certainty, and predictability of tax structures. According to the Court, such actions are “reflective of good administrative practices, preserved the sovereign autonomy of the Member State and ultimately enhanced the overall functioning of the CSME”.
