Insurers say no formal notice from gov’t regarding VAT on health insurance

Insurers say no formal notice from gov’t regarding VAT on health insurance

NASSAU, BAHAMAS — The insurance industry has not received a formal advisory from the government regarding a reported deferral of the implementation of changes to the treatment of Value-Added Tax (VAT) on health insurance, according to Marcus Bosland chair of the BIA’s health insurance committee.

Bosland said: “While the BIA has read with interest the Minister’s statements regarding a deferral of the VAT rule change, the Government has not yet formally advised informed the industry. We are hopeful that a formal statement will come from the Government soon.”

Minister of Economic Affairs told the Nassau Guardian last week that the government will not implement the changes to the treatment of value-added tax (VAT) on health insurance on April 1.

The Ministry of Finance (MOF) has previously stated that the practice of insurers claiming VAT paid on payouts as inputs is not allowed in law. The Bahamas Insurance Association has warned that medical bills and treatment costs for thousands of Bahamians will increase due to the Ministry of Finance’s decision to stop insurers from recovering the 10 percent VAT paid on health insurance claims payments. 

The BIA has also warned that the move will likely make healthcare less accessible and unaffordable for Bahamians – a claim the Ministry of Finance has dismissed.

According to the Ministry of Finance, the government believes the impact of this change on the individual or group health insurance client would be insignificant.