In its latest newsletter, the Franco-Haitian Chamber of Commerce and Industry CFHCI wonders if the real objectives pursued by the proposal of the Ministry of Economy and Finance (MEF), to revise upward the tariff of some products, annexed to the 2018-2019 budget to be voted on in Parliament https://www.haitilibre.com/en/news-24770-haiti-economy-towards-an-increase-of-tariffs.html , are truly of economic order, doubting the effectiveness and impact of such a measure on local production as the Department asserts.

As a general rule, such measures should first be the subject of consultations with the private business sector which is primarily concerned by these measures as well as a large part of civil society. However, the note from the Private Sector Economic Forum (FESP) issued a few days ago in response to this revision project implies that there had been no real consultations but rather a presentation from the Ministry to inform these provisions https://www.haitilibre.com/en/news-24806-haiti-politic-the-scale-of-the-tariff-increases-proposed-worries-the-economic-forum.html

The CHHCI stresses "We can not oppose the principle of revisions of tariffs whenever it is necessary and when we think of the legacy of ultra-commercial liberalism of the late 80s and years 90 which has created an economy that is too open and dependent on imports. This does not justify any revisions to ad hoc and arbitrary tariffs that are very often included in MEF's annual budgets, whereas tariffs should be the subject of a separate law and voted separately. The opinions of the Superior Court of Auditors and Administrative Litigation produced each year on the draft budget law unequivocally evoke this irregularity, but still remains a government practice despite its non-compliance.

Another aspect to be analyzed concerns the objectives of the tariff revision. In general, commercial measures, including tariffs, must be part of a general commercial policy framework with clear objectives over a specific period with specific, well-defined means. Nevertheless, in this context, commercial policy does not exist and the economic objectives in terms of growth and job creation are not defined and are not pursued either. In other words, these proposed tariff revisions are much more like provisions for collecting higher customs revenue on an ad hoc basis in this context of a budget deficit.

Higher tariffs could be considered very selectively, as they will make foreign products less competitive on the basis of price, but to benefit local production, tariff increases should be coincided with accompanying measures and facilitation of local production. Otherwise, the measures may have the opposite effect by causing higher inflation on imported products which should result in a decrease in the purchasing power of households in the short and medium term and at worst this rate increase can even increase the level of consumption, tax evasion and smuggling faced with weak public control and perception institutions.

How are we going to help local production when tobacco as raw material is taxed as strong as cigarettes as a finished product? These inconsistencies justify broader and deeper reflection and more consistent discussions to arrive at strategies that are in line with national economic objectives [...]"

See also :

https://www.haitilibre.com/en/news-24770-haiti-economy-towards-an-increase-of-tariffs.html

https://www.haitilibre.com/en/news-24806-haiti-politic-the-scale-of-the-tariff-increases-proposed-worries-the-economic-forum.html

HL/ HaitiLibre