Dominica will end tax compounding on imported goods from October 1, 2026, with VAT and Excise Tax calculated solely on the CIF value.
Dominica: The Government of Dominica has announced that it will eliminate the practice of compounding taxes on imported goods effective October 1, 2026, sharing that Value Added Tax (VAT) and excise taxes will be calculated sorely on the CIF value. This change is aimed at simplifying the import taxation system and reducing additional costs.
The landmark policy shift was announced in Parliament by the Minister of Finance, Economic Development, Climate Resilience and Social Security, Dr. Irving McIntyre, as he presented the National Budget for the fiscal year 2026/2027 on Tuesday, August 4, 2026.
In his address, the Minister of Finance shared that the shift addresses the citizens and business owner’s long-standing concerns regarding the complex and expensive port clearance process. He noted that the Government has listened and is committed to “modernising the clearance system at the ports of entry and reducing costs and delays.
As of now, Excise Tax and VAT of imported goods in Dominica are not only calculated on the cost, insurance, and freight (CIF) value of the goods; but also on other charges and taxes, including the Customs service charge, environmental surcharge or levy, import duty and Excise Tax, a practice known as tax compounding.
Noting the burden the structure is placing on the citizens, Minister McIntyre announced, “This Government has examined the tax structure applied to imported goods and has decided to make some adjustments. Effective 1st October 2026, Government will end this practice. Excise Tax and VAT will instead be calculated solely on the CIF value of imported goods.”
Dr. McIntyre shared that the change is a strategy will improve the ease and cost of doing business in the country.
“Every unnecessary delay, duplicated document and avoidable storage or administrative cost is eventually reflected in the price paid by a consumer. Modernising the clearance system is therefore a priority,” he expressed.
The Government has stressed that savings from the tax change should be passed down to the consumers.