Bahamas Implements VAT
January 5, 2015 Taxation in Bahamas
NASSAU – Value Added Tax has been implement in the Bahamas, despite concerns that it will negatively impact the islands’ poorest citizens.
On January 1st the new VAT system in the Bahamas came into effect with a rate of 7.5 percent, and businesses now have until February 28th to ensure that they are fully compliant with the new system.
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.
The tax was approved by the House of Assembly in August last year, after long periods of heated debate, as the proposed system is expected to have a significant negative impact on the country’s poorest citizens.
However, despite the long-standing criticism, the Prime Minister of the Bahamas Perry Christie assured taxpayers that the system has not been rushed in to effect, and will be effective and beneficial for the country.
Photo By: Deb Nystrom