How import duty, SCT and GCT compound on a vehicle

The dealer rate sheet lists three percentages for every band: import duty, special consumption tax and general consumption tax. Add them up for a common petrol car and you get 50%. The sheet’s own aggregate column says 58.9%. The difference is not a mistake. It is the order in which Jamaica Customs applies the charges, and once you see it, every number on the sheet makes sense.

Each charge is assessed on a bigger base than the last

Customs starts from the CIF value of the vehicle in Jamaican dollars: the price you paid, plus insurance, plus freight to Kingston, converted at the Bank of Jamaica rate on the day of clearance. Then it applies the charges in a fixed order, and each one is calculated on the running total rather than on CIF alone.

1. Import duty is charged on CIF. For a petrol car that is 20%.
2. Special consumption tax is charged on CIF plus the import duty. A 1.5 litre petrol car carries 10% SCT, so the SCT is 10% of 120% of CIF, which is 12% of CIF.
3. GCT is charged on CIF plus duty plus SCT. Motor vehicles carry 20% GCT, not the 15% standard rate, so on this car it is 20% of 132% of CIF, which is 26.4% of CIF.
4. The environmental levy is 0.5% of CIF, charged on every import regardless of band.
5. The customs administrative fee is a flat amount in Jamaican dollars: J$66,000 for a new vehicle and J$69,000 for a used one on the dealer sheet.

Add the four percentage lines together and you get 20 + 12 + 26.4 + 0.5, which is 58.9% of CIF. That is the figure the rate sheet prints as the aggregate, and it is what the rate table on this site shows beside every band.

A US$10,000 car, line by line

Here is the same arithmetic on a used 1.5 litre petrol car priced at US$10,000 CIF, converted at today’s Bank of Jamaica selling rate of J$157.98 per US$1. Every figure comes from the calculation the calculator runs, not from a rounded percentage.

Notice that the GCT line is the biggest of the three taxes even though its rate is the same as the duty rate. It is charged last, on the largest base. That is the practical consequence of compounding: any increase in duty or SCT is multiplied by 1.2 before it reaches your bill, because GCT rides on top of it.

Why the aggregate jumps so much between bands

The rate that moves most between bands is SCT, and SCT sits in the middle of the stack. Going from a 1.5 litre petrol car to a 2.5 litre one raises SCT from 10% to 20%. On paper that is ten points. After compounding it is 14.4 points, because the extra SCT is charged on CIF plus duty and then GCT is charged on the extra SCT. The aggregate goes from 58.9% to 73.3%.

The same mechanism is what makes the hybrid and small-engine bands attractive. Removing SCT entirely does not just save the SCT line. It also shrinks the base GCT is charged on, so a hybrid at 20% duty and 20% GCT lands at 44.5%, a saving of 14.4 points against the petrol car with the same engine. The hybrid guide goes through what that is worth in dollars.

Where the flat fee fits

The customs administrative fee is the one line that does not scale with the price. On a US$8,000 hatchback it is a noticeable share of the charges. On a US$40,000 SUV it is a rounding error. This is why the calculator and the rate table report an aggregate rate that excludes the fee: the rate is comparable across vehicles, and the fee is simply added on at the end.

What compounding does to a rate change

Because of the order of assessment, a change to any one rate has a different effect depending on where it sits:

• A one-point change in import duty moves the aggregate by 1 × (1 + SCT) × (1 + GCT). On a 10% SCT band that is 1.32 points.
• A one-point change in SCT moves the aggregate by (1 + duty) × (1 + GCT). At 20% duty that is 1.44 points.
• A one-point change in GCT moves the aggregate by (1 + duty) × (1 + SCT). At 20% duty and 10% SCT that is 1.32 points.

This is worth knowing when a Budget announcement changes one rate. The headline number understates what reaches the wharf.

Checking a broker’s assessment

When your broker sends the assessment, you can check it in a minute with this order. Confirm the CIF in Jamaican dollars first, because every other line depends on it. Then confirm the band, which sets the three rates, and work down the stack. If a line does not match, the usual explanations are a different exchange rate, a different band because the engine size or weight on the export certificate differs from the listing, or a newer rate sheet than the April 2020 revision this site uses. Ask which of those it is before assuming an error.

The calculator runs exactly this arithmetic for any vehicle type, fuel and engine size, and the rate table shows every band with its aggregate beside it.