Michael Halkitis
NASSAU, The Bahamas--The government will lose an estimated US $30 million in revenue this fiscal year as a result of its decision to decrease the rate of value-added tax (VAT) by fifty per cent on all food sold in food stores, beginning in April, Minister of Economic Affairs Michael Halkitis said on Thursday.
He confirmed during a press briefing at the Office of the Prime Minister that the decrease is not meant to be temporary.
“It’s permanent,” he said.
Wednesday night, Prime Minister Philip Davis said beginning April 1, the rate of VAT will be cut in half from 10% to 5%.
“This new 5% rate will apply to all food in the food stores, including fresh fruits and vegetables, baby food, lunch snacks and frozen food,” Davis said in a national address.
“However, it will not apply to prepared food in the deli. This rate reduction will also apply to the importation of all items previously mentioned.”
Halkitis said the government can afford the concession, adding that government finances have stabilised.
“We’re saying that at this time, our economy has recovered, our finances have recovered, and we can give this concession to the people,” he said.
This will be the second time the Davis administration reduced VAT. ~ The Nassau Guardian ~
