12% VAT is here

 

Prime Minister Dr. Hubert Minnis addresses residents of Cat Island.

PM defends VAT to Family Island residents

The 4.5 percent increase in value-added tax (VAT) went into effect Sunday as residents flocked to the grocery and supplies stores before the tax hike kicked in.

Despite public pushback on the tax, the nation’s leader, Prime Minister Dr. Hubert Minnis has been on a nationwide campaign explaining why the government found it necessary to proceed with the increase.

At a town hall meeting in Long Island on Saturday, Dr. Minnis reiterated the country could ill-afford to continue to “kick its financial problems down the road”.

“We are protecting future generations,” Dr. Minnis said.

“We had to make the difficult decisions as painful as it may be.”

The government, he further explained to residents, believed that it was best to deal with the country’s financial burdens now.

“I would prefer to lose an election than a country,” he said.

“Country must always come first … never put self-preservation or self-gain before country.”

Dr. Minnis said that if VAT remained at 7.5 percent, The Bahamas would have to borrow $661 million and also risk a further downgrade.

“Our interest would have also gone up and we would be viewed as bad creditors and we would have been forced to go to international agencies to make decisions for us, and we did not want that.”

Charges on all goods and services increased to 12 per cent. The tax is expected to be eliminated from breadbasket items on August 1.