The Executive Yuan Council passed a draft amendment to the Customs Import Tariff (CIT) today and will send it to the Legislature for deliberation. The amendment is meant to bring Taiwan's CIT in line with international standards.
According to the Ministry of Finance (MOF), although the Republic of China is not a member of the World Customs Organization (WCO), since 1989 it has followed the organization's Harmonized Commodity Description and Coding System (HS). The CIT is being amended to harmonize with HS 2012, which the WCO updated in response to technological advancement and changes in trade patterns.
The amendment will maintain the internationalization of Taiwan's tariff classification, facilitate free trade agreement (FTA) consultations with other countries, and increase monitoring of environmental issues of public concern, officials said.
The amendments are summarized as follows:
I. The monitoring and control of commodities that impact the environment or ecology are strengthened in compliance with requests from world organizations:
1. Food safety management is reinforced to meet the requirements of the Food and Agriculture Organization of the United Nations' Global Information and Early Warning System, e.g. adding "cod and other species of fish" to Chapter 3 of the CIT to help preserve fish stocks.
2. The monitoring and control of special chemicals and pesticides in accordance with the Rotterdam Convention are reinforced, e.g. adding Tariff No. 291616 regarding Binapacryl (ISO).
3. The monitoring and control of substances that deplete the ozone layer are reinforced in accordance with the Montreal Protocol, e.g. adding Tariff No. 290371 regarding Chlorodifluoromethane (HCFC-22).
II. In response to changing trends in international trade, revisions include:
1. Creating headings and subheadings for goods produced due to technological advancement, e.g. Heading No. 3826, "biodiesel and mixtures thereof."
2. Deleting subheadings traded in low volume and combining them with others, e.g. Subheading No. 110210, "rye flour," and Subheading No. 291421, "camphor."
3. Refining the classifications of existing goods to meet trading needs, e.g. adding Heading 9619, "sanitary towels (pads) and tampons."
Revisions based on HS 2012 follow these guidelines:
1. In principle, tariff rates are unchanged if the commodity classification number alone has changed.
2. For commodities with different tax rates that are combined into a single tariff number, the new tariff rate may be based on the commodity with the lowest rate or largest trading value or the trade-weighted or arithmetic average, as recommended by the agencies responsible for each industry.
3. The regular rate is levied on goods no longer bound by tariff quotas.
The MOF said the amendment will have three major benefits:
1. Taiwan's data for commodity categorization, import, export, and tariffs will be in line with the latest HS standards.
2. Using the standardized tariff system helps fast-track Taiwan's FTA negotiations and streamlines procedures for traders.
3. Environmental monitoring is strengthened: special tariff numbers are created for commodities which international organizations indicate would impact the environment or ecology to make them easier to track.