A VAT for the Bahamas?

Not unlike many other countries, the government of the Bahamas is focusing on tax reform. I have posted about this earlier here. The objectives of this tax reform look equally familiar:

  • to secure an adequate revenue base in support of modern governance;

  • to establish a tax structure that promotes economic efficiency and stronger economic growth; and

  • to make the tax system more equitable.

Together with lower import duties and elimination of other business taxes, the introduction of a Value Added Tax (VAT) as of July 1, 2014 has been proposed, at a standard rate of 15%.

Although this looks like a shift from business taxes to consumer (consumption) taxes, it should be noted that the business taxes were likely on-charged to the consumers anyway. I would be surprised, however, if businesses in the Bahamas would now lower their retail prices net of VAT.

See here for the White Paper on VAT that the government of the Bahamas published (opens in a new window):

http://www.bahamas.gov.bs/wps/wcm/connect/8765bd53-8803-4bd2-9016-55932e7c4a72/white+Paper-+Tax+Reform.PDF?MOD=AJPERES

 

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