What the New Value Added Tax Means for Visitors to the Bahamas


Above: Nassau (CJ Photo)

By the Caribbean Journal staff

The Bahamas has officially implemented a new Value Added Tax regime, one which will effectively mean a slight reduction in taxes for visitors.

Value Added Tax is a consumption tax on goods and services; it will be charged on goods like clothing, furniture, household appliances, legal services and property insurance premiums, among others.

The 7.5 percent VAT, which will be charged on hotels and home rentals along with other services supplied to guests, replaces what had been a 10 percent hotel guest tax in the Bahamas.

Now no hotel or holiday accommodation operator can charge a hotel guest tax in the Bahamas.

Duty free shoppers will be provided with an immediate VAT refund on the point of sale.

In a statement, the Bahamas’ government said “The removal of the Hotel Guest Tax and the introduction of the VAT at a reduced rate is indicative of the government’s determination to make a vacation in The Islands of The Bahamas the best value for money for visitors, allowing them to keep more money in their pocket to spend as they wish.”

“Thanks to responsible fiscal management by our government, our Ministry of Finance is are able to reduce the tax that is charged to visitors to make it more affordable to holiday in the Islands of The Bahamas. We are determined to make a Bahamian vacation the best value for money in the world for a holiday,” said Tourism Minister Obie Wilchcombe.

The Bahamas is the latest CARICOM member state to implement VAT.

A push for a similar VAT in the nearby Turks and Caicos failed after encountering much public opposition.


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