Move to de­velop Cus­toms Bonded Ware­houses

LO­GIS­TICS VI­SION: Be­sides contributing an es­ti­mated RO 100m to Oman’s GDP, ware­houses also have po­ten­tial for cre­at­ing di­rect jobs

Oman Daily Observer - - FRONT PAGE - CON­RAD PRABHU MUS­CAT, SEPT 16

Promis­ing head­way is be­ing made in pre­par­ing the ground­work for the growth of Cus­toms Bonded Ware­houses at key lo­ca­tions around the Sul­tanate — a move that could po­ten­tially add RO 100 mil­lion an­nu­ally to the Gross Do­mes­tic Prod­uct when it is a re­al­ity ten­ta­tively by the year 2020.

The ini­tia­tive is be­ing spear­headed by Tan­feedh — the Na­tional Pro­gramme for En­hanc­ing Eco­nomic Di­ver­si­fi­ca­tion — with the sup­port of a num­ber of stake­hold­ers, no­tably the Royal Oman Po­lice Cus­toms, Min­istry of Trans­port and Com­mu­ni­ca­tions, Min­istry of Com­merce and In­dus­try, Oman Global Lo­gis­tics Group (ASYAD), Sec­ond and Third Party Lo­gis­tics firms, and ship­ping and freight for­ward­ing agen­cies.

Cus­toms Bonded Ware­houses are typ­i­cally se­cured areas in which im­ported du­tiable mer­chan­dise may be stored with­out any pay­ment of cus­toms duty (and Value Added Tax when it is even­tu­ally in­tro­duced) for a pe­riod of time (up to five years in the United States, for ex­am­ple) with­out any pay­ment of duty.

Dur­ing this pe­riod, the goods may be re­pro­cessed, value added, knocked down and re­assem­bled, sorted, blended (where liq­uids are con­cerned) or sub­jected to other forms of value adding ini­tia­tives. They can be re-ex­ported in their value-added form with­out pay­ment of duty, or al­ter­na­tively sold in the lo­cal mar­ket upon the pay­ment of cus­toms and other ap­pli­ca­ble taxes.

The ini­tia­tive — one of 120-plus project pro­pos­als un­veiled by Tan­feedh — has im­por­tant ram­i­fi­ca­tions for the Omani govern­ment’s vi­sion to drive lo­gis­tics-based eco­nomic ac­tiv­i­ties in the Sul­tanate. Be­sides contributing an es­ti­mated RO 100 mil­lion to GDP an­nu­ally, Cus­toms Bonded Ware­houses also have the po­ten­tial to cre­ate around 350 di­rect jobs, says Tan­feedh.

Last week, au­thor­i­ties hailed ini­tial ef­forts, no­tably by ROP Cus­toms to pi­lot doc­u­men­ta­tion nec­es­sary to sup­port cus­toms bonded im­ports via the Bayan sys­tem. Suc­cess on that front prom­ises to lend strong im­pe­tus to the growth of Cus­toms Bonded Ware­houses pri­mar­ily by the pri­vate sec­tor, say ex­perts.

At present, the po­ten­tial for eco­nomic ac­tiv­i­ties based on Cus­toms Bonded Stor­age is con­strained by a se­vere dearth of such bonded ware­houses, says Tan­feedh. Ad­di­tion­ally, ex­ist­ing bonded ca­pac­ity is not op­ti­mally utilised sim­ply be­cause of the ab­sence of in­cen­tives to drive in­vest­ments in value-add ac­tiv­i­ties.

“There is an ur­gent need to es­tab­lish new bonded cus­toms ware­houses to meet the grow­ing de­mand,” said Tan­feedh, adding that its ini­tia­tive aims to sup­port the con­struc­tion of cus­toms bonded ware­houses for the stor­age of “man­u­fac­tured du­tiable goods in strate­gic, high pro­duc­tiv­ity sites such as Suhar, Salalah, and Al Mazy­ona (on Oman’s bor­der with Ye­men).”

Pic­ture for il­lus­tra­tion only

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