NASSAU, BAHAMAS – Hotels will be required to register every bar and liquor outlet on their property as part of new Business License Act requirements, with the government also imposing prohibitions on walk-up windows and takeaway alcohol sales.
Acting Controller of the Department of Inland Revenue Shunda Strachan, while addressing a meeting of the Bahamas Hotel and Tourism Association on Thursday, said: “This new Section 9 of the Business License Act that speaks to liquor registration, makes it mandatory for every single operation in the Bahamas to register. The only exclusion is the Freeport area that is operated under the Hawksbill Creek Agreement. They are excluded from this, but all family islands, all hotels, all cruise destinations will have to register.”
She explained that while hotels currently operate under a general hotel license, they will now need to formally declare and register each restaurant, bar, and liquor outlet on their property. “Major change in the sense that you will have to make application for the registration of your liquor establishments. Right now, the Department of Inland Revenue, as it relates to the business license side, does not track that, right? With the hotels, we don’t track at all. We don’t track the number of liquor establishments that are in a hotel. We simply give you a hotel license, and the hotel operates or opens as many restaurants and bars, liquor stores, as it deems necessary in the hotel. We have no record of how many restaurants and bars or liquor stores are in your hotel. We know you have a hotel license, and that kind of gives you a carte blanche to operate and open the establishments that you need to open in that hotel.”
Going forward, she said, hotels will have to go onto the new Liquor Registration Portal, indicate the number of outlets they operate, and upload a copy of their hotel license. “That will suffice for liquor registration for the hotels, because we do realize that the Hotel Licensing Board does a really thorough inspection of all the hotels.”
At the same time, Strachan made clear that certain practices will no longer be tolerated. “One of the concerns is around, I think, what we are now calling cages, where you have the walk-ups. There are no more cages. Cages will not be approved. Let me say it like that, and so approvals will not be granted for takeaway restaurants to sell alcohol. That is now a new thing I’m told. I don’t want to prejudice a particular community, but I think you know who I mean. They have lots and lots of restaurants and little stores, and now their restaurants have turned into takeaways. Those types of establishments will no longer be allowed.”
Beyond those changes, Strachan outlined how the Department of Inland Revenue is targeting compliance across several tourism-linked areas.
She said hotels have long enjoyed incentives under the Hotels Encouragement Act, but new players in the industry—such as condo hotels and short-term vacation rentals—must also be paying their fair share. “For us, enforcement around the condo hotel tax arena is key. We do realize that there are some players in this area that aren’t really compliant in that persons are taking advantage of being a part of rental pools. They get tax advantages over hotels and those that are not or that are being taxed. They get advantages like real property tax. They don’t pay real property tax, but the thought was or is that they should be paying at least business license fees and value-added tax. And so for us at Inland Revenue, we are doing more in the area of policing the condo hotel tax.”
Short-term rentals, particularly on the Family Islands, are another growing concern. “We’re seeing an explosion of short-term vacation properties on the family islands, particularly the island of Eleuthera, especially Harbor Island, and also Exuma. And so for us, like if you go to Exuma, you’re hard pressed to be able to rent a property long-term. As we found out when we sent officers to the family islands, we really couldn’t find any rental units because everything was being offered on the short-term vacation rental basis.”
She revealed that some properties are commanding extraordinary rates while escaping registration. “Like the other day we looked at a property you could rent for seven days at a smaller cost of $43,000 for the week. And so we’re seeing very high-end properties being rented on the family islands, but what we did not see is the level of registration for business licenses and VAT purposes for those properties.”
Foreign realtors and offshore ownership structures have added to the enforcement challenge. “If you are in the short-term vacation rental area and you are a foreign owner, or you are a company, you should be registered for business license and registered and paying value added tax. So, for the Department of Inland Revenue, that is one of the areas that we have stepped up our compliance activities on.”
The government has also moved to close VAT gaps at cruise line private islands, which until last year enjoyed VAT-free status on items such as food, drinks, and excursions. “Once their visitors got to their destinations, which is in The Bahamas, the items sold or the services rendered were excluded from the charging of VAT, or I should say the collection of VAT, but that has changed. In 2024, the government amended the legislation, and so we’re now stepping up compliance. We’ve had several visits to the various destinations to ensure that the right amount of VAT is being collected, and our large taxpayers unit are actively ensuring that the cruise lines or the destinations are properly filing and that they are properly collecting and paying the VAT.”
Strachan closed with an update on the department’s digital overhaul, unveiling the new “One Tax Bahamas” platform set for launch later this year. “One Tax Bahamas will be coming. You will be hearing a lot more about One Tax Bahamas. It will be a new portal that is designed to give you more accessibility to us and also to do a lot of things for yourself that we now utilize a lot of manpower doing that you could do if we had a proper portal set up for you to do it.”
