The Commonwealth of Dominica is set to roll out a landmark customs reform this October that will scrap the long-standing practice of compound taxation on imported goods, a policy shift expected to cut cross-border shipping costs and ease financial pressure on both local businesses and consumers.
Finance Minister Dr. Irving McIntyre unveiled the change during his official national budget address on Tuesday, confirming that starting October 1, 2026, both Excise Tax and Value-Added Tax (VAT) for all incoming imports will be calculated exclusively on a shipment’s Cost, Insurance, and Freight (CIF) value.
Under the current tax regime, the base value used to calculate import taxes already includes pre-existing levies and administrative fees, creating a cascading effect where one tax is applied on top of another. This compounding structure has pushed up the total tax burden for importers for years. “At present, Excise Tax and VAT on imported goods are calculated not only on the cost, insurance and freight value…but also on other charges and taxes. That is tax compounding,” McIntyre explained in his address.
The government anticipates this policy adjustment will deliver three core benefits: a reduction in overall import costs, simplified tax calculation procedures for customs authorities and importers alike, and a more attractive operating climate for local and international businesses operating in Dominica. McIntyre explicitly acknowledged that the government has received sustained feedback from Dominican residents and business groups about excessive costs and bureaucratic delays associated with clearing goods through the island nation’s ports. “An efficient clearance system should facilitate commerce, not frustrate it,” he emphasized.
The finance minister also highlighted that long-standing customs inefficiencies do not stay at the border—they ultimately get passed down to end consumers. Importers routinely roll avoidable administrative overhead, storage fees and delay-related costs into their final retail prices, meaning ordinary households absorb the burden of outdated tax practices. “Every unnecessary delay, duplicated document and avoidable storage or administrative cost is eventually reflected in the price paid by a consumer,” McIntyre said.
To ensure the reform delivers its intended benefits to the public, the Dominican government has issued a clear warning to local businesses: it expects the full savings generated by the tax change to be passed on to consumers, rather than being absorbed into expanded corporate profit margins. “Where concessions or reductions are granted, they should be reflected in lower costs rather than absorbed into larger profit margins,” McIntyre stated.
This upcoming customs reform forms a core plank of the government’s broader national strategy to cut the overall cost of doing business in Dominica and deliver tangible cost-of-living relief to local households.