Prime Minister of the Bahamas, Perry Christie has announced a lower Value Added Tax rate and a delayed implementation date for VAT. Initially the rate was set at 15% but Prime Minister Christie announced yesterday in his annual budget communication that Government will introduce Value Added Tax at 7.5%.There was also questions from hotel owners concerning the 10 percent tax on hotel rooms that would be converted into VAT. The Prime Minister alerted that the 10 percent hotel room tax would be reduced to 7.5% as well. The legislation is set to come into effect on January 1, 2015.
Also mentioned in the budget communication was an overview of various tourism-related investments and infrastructure projects throughout the country. The government spoke to its intention to eliminate customs processing and attendance fees for commercial airlines. Notably, what would be the backdrop of this chance would be a $4 raise in departure tax fees from $25 per person to $29 per person, effective Oct 1, 2014. Prime Minister Christie also has plans to address the Gambling Bill and the regularization of web shops in the country to tie up the loose ends on the subject after the budget is passed. In the meantime, persons from the private sector welcomed the drop in the suggested 15% VAT to 7.5%. It was said in a Tribune article that the private sector was lobbying for the rate to be anywhere between 5 – 7 percent. Overall, this years budget is very vital for the country when unemployment across the country is still a very important issue. This year’s budget and tax reform is set to impact the country significantly, especially the real estate industry.