Tuesday, May 13, 2014

The Bahamas Get More Expensive

We belong to the Royal Marsh Harbor Yacht Club which offers a lot of benefits to cruisers traveling in the Abacos and the Bahamas in general. I received this email today which explains the pending VAT and thought you might like to take a look-see. I've posted it here in its complete form.

On 17 June last year, we posted a heads up that the Bahamas were on track to introduce a Value Added Tax (VAT) 1 July 2014.
Well, that's just a few weeks away. Be prepared for everything in the Bahamas to cost up to 15% more (or more) than it does now. For many, it just means cruising there 15% less time, or shortening marina stays or eating out less because they have a fixed budget for visiting the Bahamas. The not so obvious part is if these reactions occur, merchants and service providers will have to increase prices even further to offset the receipts they lose. That 15% has to come from somewhere.
From the Bahamas' VAT Site
To Government's credit, they have built an excellent website dealing with the issue. Give it a look. There is nothing in the site that leads one to believe that there will be a VAT for citizens and a different VAT for visitors [along the lines of the GST refund for tourists in Canada], but one complexity for visitors to deal with is: there will be businesses that can collect VAT and those that can't. The former will add VAT to the price, and the latter will include it in the cost [and passed on in the price]. Good luck sorting it out.
As expected and predicted by many, it appears the VAT is no longer even principally about offsetting reduced Customs revenue (zero-balance). It is about collecting more revenue. The underlying mechanism for this is to add the taxation of services to the taxation of goods. It's their country; it just pays to know what's going on before you get there.

1 comment:

Brilliant Star said...


Thank you for reblogging this. The Nassau Guardian updated the situation, and I updated my post. Below.



According to the story linked above (note date) it won’t be 1 July 2014, and it may not be 15%. But the delays are about clarity of implementation not commitment to policy.