News

Bahamas Planning to Introduce 7.5 Percent Value Added Tax in 2015

By: Caribbean Journal Staff - May 30, 2014 - 6:11 pm

Above: Bahamas Prime Minister Perry Christie

By the Caribbean Journal staff

The Bahamas is planning to introduce a new 7.5 percent value added tax, the government announced this week.

The tax will be a single VAT rate across the board, although that is lower than an initially proposed 15 percent tax.

The country’s Ministry of Finance said the lower rate would also mean fewer exemptions.

The ultimate plan is for the tax to come into effect on Jan. 1, 2015, after what the government said would be an “in-depth public education campaign and private sector preparation.”

The Ministry of Finance also said it was proposing VAT locked in pricing rather than VAT exclusive, with the aim to “simplify price comparisons by consumers, especially when navigating between VAT registrants and non-registrants.”

“The price consumers see will always be the price they pay,”

The move will also mean that the hotel occupancy tax will be eliminated.

Government estimates predicted that the new VAT along with a basket of other fiscal provisions would increase the revenue yield of the Bahamas’ revenue system to 19.8 percent of GDP, up from 17.1 percent in the current fiscal year.

Christie said the goal with the mix of fiscal measures was to eliminate the “untenable structural imbalance between recurrent expenditure and revenue” by the 2015/2016 fiscal year, sharply reduce the GFS deficit by 2016/2017 and “arrest the growth in the government debt burden and move it onto a steady downward path to more sustainable levels.”

“I want to emphasize, at this point, that we are in no way engaged in unrealistic, pie-in-the-sky, wishful thinking on the score of fiscal redress,” Christie said. “With a keen eye on the state of our economy and mindful of the need to maintain and support its upward, forward momentum, we are embarked on a mutually-reinforcing plan of national development and fiscal consolidation that is balanced and measured. As such, our aim is set on gradual, though assured, progress on the fiscal front.”

The Bahamas would be the latest in a line of Caribbean countries to introduce a VAT; St Lucia was the most recent country to do so.

A value-added tax proposal by the United Kingdom government in Turks and Caicos was shelved last year after opposition from businesses.

Popular Posts antigua long bay

25 Perfect Caribbean Beaches to Add to Your Summer Bucket List

There’s nothing like a Caribbean beach in summer. The crowds thin out, the winds relax, and the islands start breathing in a different way. The beaches you thought you knew feel new again— stretches of sand once packed with winter […]


The 15 Best Hotels in Trinidad and Tobago, From Hidden Eco-Retreats to Luxury Towers

trinidad and tobago hotels where to stay

From Port of Spain to Tobago’s quiet coasts, these are the places to check in now No two Caribbean islands are quite like Trinidad and Tobago—and no two hotels here feel the same. This is a destination of contrast: Carnival […]


This Marriott All-Inclusive Resort Is Coming to Barbados —  And You Can Book It With Points

new brand for the caribbean

Barbados has long been a haven for adults in search of refinement — the kind of place where luxury and culture blend in quiet, confident harmony. Now, that ethos is becoming the foundation of a new resort concept that aims […]


Related Posts bahamas beach club

Royal Caribbean's New Bahamas Beach Club Will Have DJs, All-Inclusive Passes and a Cabana With Its Own Waterslide

There’s a whole new reason to get off the ship in Nassau. Starting this December, Royal Caribbean is launching a beach experience unlike anything else in the Caribbean: Royal Beach Club Paradise Island — a bold, all-inclusive escape that turns your stop […]


The Most Famous Beach in Turks and Caicos Has Powder-Soft Sand and a Vibe You’ll Never Want to Leave

turks and caicos beach grace bay

This short video takes you to a moment on the picture-perfect white sand of Grace Bay Beach in Turks and Caicos, a beach I’ve loved from my first footprint there. It goes on and on, perfect white sand. That ethereal […]


Aztec Airways Is Launching Daily Service Between Fort Lauderdale and Abaco

treasure cay beach

The Bahamas is getting even easier to reach. Aztec Airways has officially launched new nonstop air service between Fort Lauderdale and Marsh Harbour, Abaco, Caribbean Journal has learned. The new route, which will operate daily, will connect travelers directly from […]