The new Customs and Excise Act is due to take effect from 1 October this year. Most of the changes that will occur from the Act were identified by businesses as having the potential to lower their costs and make their lives easier.
The new Act:
- updates Customs’ processes so that they are appropriate for the modern business environment and can be adapted as that environment evolves
- addresses some of the known pain-points generated under the 1996 Act
- introduces some new services.
An implementation programme is underway to ensure that the New Zealand Customs Service (NZCS) is ready to implement the new Act as soon as it comes into effect.
The NZCS is working with stakeholders to inform the guidance and information resources to help customers understand the changes, what they mean, and what they may need to do. Regulations and Rules are also being developed to support the implementation of the Act.
NZCS developed a brochure for the Customs Brokers and Freight Forwarders (CBAFF) annual conference held in Nelson 2 – 4 May 2018, that you can read online. Some excerpts:
Major improvements for business
- Provisional Values: Will allow importers to declare a Customs value at the time of import with exact value to be disclosed within a timeframe. Once a provisional value has been declared, the importer will be required to declare the final Customs value within the specified timeframe, which is based on the end of the importer’s financial year plus 12 months.
- Valuation Rulings: Can now obtain binding rulings. This service will be time bound, with the maximum timeframe for Customs to issue this type of ruling being 150 days. Customs will be cost recovering for the time spent working on the ruling application.
- Storing Business Records: Can now store records in the cloud and offshore
- Excise Changes: Changes that make complying with Excise requirements easier to do
- JBMS: Users now required to maintain a level of competency to obtain and retain registration
Clarify sanctions and penalties
- Compensatory Interest and Late Payment Penalty: A more proportionate compensatory interest and penalty regime for late and shortfall payments of duty
- Administrative Penalties: Clarification of level of penalties and the circumstances when a penalty will apply. Administrative penalties have been extended to include export entries, and the penalty for material errors or omissions is $200.00. If the error resulted in a shortfall of duty being paid or declared, or excess drawback being claimed, the penalty is 20% of the undeclared duty or excess drawback, capped at a maximum of $20,000 for lack of reasonable care; 40% capped at $35,000 for gross carelessness; and 100% capped at $50,000 for an error made knowingly.
- Infringement Notices: The petty offences regime ends at 1 October 2018. The infringement notice scheme will be introduced on 1 April 2019, with education provided from 1 October 2018
- Comptroller’s discretion: The Comptroller or their delegate will have explicit statutory discretion applying to the making and correcting of assessments and collecting duty
Administrative Review: Gives the right to use an internal review process where you are dissatisfied with an assessment of duty or the issuing of a penalty before making an appeal to the Customs Appeal Authority.