NASSAU, BAHAMAS — Prime Minister Philip Davis announced during a national address on Monday night that the Government will eliminate Value Added Tax (VAT) on unprepared food, calling the move a necessary step to ease the cost-of-living pressures still facing Bahamian families.
The VAT removal, from five percent to zero, builds on earlier measures taken by the Davis administration, including lowering VAT on food from 10 percent to five percent last year. Davis said eliminating the tax entirely is intended to ensure savings are immediately felt by consumers. “It is a significant step, and one we hope will really help,” he said, noting that the measure complements broader efforts to reduce costs through energy reform, expanded trade partnerships, and increased domestic food production.
The Prime Minister also announced expanded property tax relief for homeowners. Owner-occupied duplexes and triplexes will now qualify for the residential property tax exemption, alongside expanded concessions for first-time homeowners. Davis said the measures are intended to help more Bahamian families reduce housing costs and build long-term wealth as part of the administration’s broader cost-of-living strategy.
“Effective April 1st, all foods currently at 5 percent VAT will be VAT free. Zero VAT on those food items. This will apply to fresh fruits and vegetables, baby food, lunch snacks, frozen foods, and other groceries – everything except prepared meals sold hot or ready to eat,” said Prime Minister Davis.
He added: “We’re also expanding property tax relief. Owner-occupied duplexes and triplexes are now eligible for the residential exemption. First-time homeowner concessions have been expanded. These are changes which will help more Bahamian families build wealth.”
The VAT announcement comes one year after Prime Minister Davis announced a series of phased VAT reductions, with VAT on all unprepared food sold in food stores being reduced by 50 percent, from 10 percent to five percent, in April 2025. The reduction applied to items such as fresh fruits and vegetables, baby food, snacks, and frozen foods, but excluded prepared deli items.
The administration later extended VAT relief to essential health and personal care items. Effective September 1, 2025, VAT on medicines, medical supplies, feminine hygiene products, and baby and adult diapers was reduced from 10 percent to five percent. Feminine hygiene products were subsequently made permanently zero-rated in August 2025. The Government said these measures were made possible by stronger economic performance and improved public finances and were designed to provide direct relief to households grappling with high living costs and inflationary pressures.
During his address Monday night, Prime Minister Davis spoke broadly about the Government’s economic stewardship, pointing to a strong recovery despite what he described as unprecedented challenges over the past decade. He cited credit rating upgrades, removal from international blacklists, and more than $10 billion in new private-sector investment as evidence that the country is on a more stable footing. “We turned collapse into recovery. We turned downgrades into upgrades. We turned crisis into progress,” the Prime Minister said.
Davis emphasized that the Government’s approach has been to act decisively while remaining fiscally responsible, rejecting the idea that relief measures and economic stability are mutually exclusive. “These policies mattered — to people, and to the country — and they were central to our recovery,” he said.
In addition to tax relief, Davis highlighted other initiatives aimed at easing household costs. “Raising the minimum wage, expanding access to free medication through the National Prescription Drug Plan, electricity bill relief and the National School Breakfast Programme,” he said, “The work is ongoing. We will continue to listen, continue to act, and continue to put the needs of Bahamian families at the center of every decision.”
