NASSAU, BAHAMAS — Economic Affairs Minister Michael Halkitis said yesterday the government’s Value Added Tax (VAT) intake appears to be “holding steady” with no apparent reduction in intake despite the rate being reduced to 10 percent in January.
Speaking with reporters ahead of a Cabinet meeting yesterday, Halkitis said that the VAT performance was consistent with the government’s forecast but noted that it’s still “early days”.
“In terms of collections, it’s early days,” he said.
“This is March so we would have the experience of the return for January and February will be coming soon. So far it’s holding steady. There doesn’t appear to be any reduction in what the government has taken in which is consistent with what we have forecasted but again it’s early days.
“As we get to another month or two we should be able to see a trend being established but so far we have not seen a reduction of the amount being collected. That is also a function of the opening of the economy and the strength of the economy we see in the tourism sector,” said Halkitis.
The government implemented the VAT reduction from 12 percent to 10 percent as of January 1, 2022 and removed the zero rating on breadbasket items. VAT was first introduced under the Christie administration at 7.5 percent.
Halkitis previously stated that the former administration’s ‘zero rating’ policy allowed the rich to accrue more savings than any other group while lower income households accrued the least benefits.
