The Bahamas - VAT Rate Increase
The Bahamian House of Assembly passed the 2018/19 Budget Communication on June 18th 2018 thereby ratifying an increase in the VAT rate from the current 7.5% to 12%. This will take effect from July 1st 2018.
The government has explained that this move is in an attempt to initially stabilise and then improve the struggling economy. They project the VAT increase will help it reap US$1.2 billion in revenue in the next fiscal year, a 60% increase compared with the forecasted VAT revenue for 2017-2018.
However, the government are attempting to alleviate the negative economic impact upon Bahamian citizens by announcing a number of zero-rated ‘breadbasket’ items, duty reductions and exemptions.
These items include butter, cooking oil, margarine, rice and flour. VAT will also be eliminated on medicines and residential insurance.