Bahamas backtracks on 15% VAT rate and faces delays
- Mar 21, 2014 | Richard Asquith
The Bahamas plans to reduce the planned 15% VAT rate for the planned introduction on VAT in July 2015. It looks certain that the Bahamas VAT July 2014 implementation date will be missed too.
Introduction of VAT for WTO membership
The implementation of VAT is a key criteria for the Bahamas’ entry into the World Trade Organisation. The country has no consumption tax at present, except for a 10% tax on hotel accommodation.
The proposed VAT system was announced at the start of 2013, and planned for 15%, with a 10% reduced rate for hotels. But at last week’s budget, it was confirmed that the rate will be reduced and the implementation put back.
The next steps are still not certain, especially given the mounting public and commercial hostility to VAT. The government confirmed that it will look at a number of studies into the alternatives to VAT which need to meet the $200m budget for VAT.