NASSAU – Value Added Tax “VAT” has been implement in the Bahamas.
As of January 1st, 2015, The Bahamas has taken on the new Value Added Tax System. Businesses around the country would now have to incorporate a VAT tax of 7.5% with breathing room until February 28, to be in good standing with the new VAT rules and regulations. Although locals expressed their disapproval of VAT and the possible extended impact that it will have on members of the lower class of the country, the reality is that it has now happened and Bahamians will have to now adjust to join many other countries around the world and get used to a tax paying system.
The tax was approved by the House of Assembly in August of 2014, after long periods of heated debate. The enforcement of the VAT system is accompanied by the removal of several excise duties on goods and products, and the drop of the previous tax on hotel accommodation, with the cumulative changes expected to make tax compliance easier, while, at the same time, making tax evasion harder. The VAT rate of 7.5 percent will only be applied to businesses with annual profits exceeding BSD 100 000, and, so far, approximately 5 000 businesses have registered for the tax.
There is still a cloud of doubt that VAT is the best idea for the country and moving forward in 2015, this will be the topic for debate for many discussions to come.
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