NASSAU, BAHAMAS — Economic Affairs Minister Michael Halkitis said yesterday the government’s decision to pursue taxes in several high-end segments was not a deliberate attempt to “target the rich” but rather to ensure that those who have the ability to pay their taxes do so.
Halkitis made the comments yesterday at a press briefing at the Office of the Prime Minister regarding the 2022/2023 budget communication presented by Prime Minister Philip Davis on Wednesday.
Halkitis noted that government is raising the maximum cap on property tax on owner-occupied property from $60,000 to $120,000. Government is also imposing a minimum tax fee of 75 percent of the real property tax assessment for high end properties which are exempt from property tax because they are in a rental pool if these properties do not generate VAT revenue equivalent to the Real Property Tax assessment.
Halkitis said: “We had a cap on real property tax. No matter how big or how much your owner-occupied home was, the max you would pay was $60,000. To put that into perspective, to get a real property tax bill for $60,000 your home must be worth $9.6 million.
“We have raised that cap to $120,000. The thought is that when you get to those levels and you do the comparison to someone living in an $800,000 or $1 million home, comparatively, the person in the lower valued home is paying more. For someone paying $120,000 on their home has to be worth $19.2 million, so we think that is equitable.”
Halkitis also noted that the government is clarifying the law on foreign yacht charters to ensure that operators of foreign yacht charters register and pay VAT.
“Yacht charters have been a vexing problem,” he said.
“There is a 4 percent fee on charters. The government is supposed to get 4 percent. What we are saying now is that those individuals have to register for VAT so we will get VAT on the cost of those charters. The charters are coming into our waters, enjoying our environment and making money.
“The government has to expend money to ensure that the environment is in good order and ensure that we have Defence Force and police around to ensure they feel safe. We don’t think it’s onerous. We did some checks and found that if you do charters in the Mediterranean, the VAT on it is 22 percent,” said Halkitis.
Halkitis said he didn’t believe the move would be detrimental to the yacht charter industry noting that for a long time persons have been “having a windfall”.
