Minister of Economic Affairs, Sen. Hon. Michael Halkitis led debate on the Value Added Tax (VAT) Amendment Bill in the Senate on Monday.
The bill, among other things, seeks to remove the remaining 5% VAT charged on unprepared food items beginning April 1st. Halkitis emphasized that the move is a part of the government’s efforts to reduce the cost of living in the country.
He said, “this measure reflects a clear philosophy that lower taxes on essential goods can help ease financial pressure on households while encouraging consumer spending and economic growth. By eliminating the tax applied to basic food items the government aims to make groceries more affordable for Bahamian families. There was some attempt to, sort of, belittle the amount of savings that households would have but the amount of savings that a household would realize depends on their spending pattern. Those people who buy more groceries they would have greater savings, people who tend to eat out more they would not have as much.”
During his contribution to the debate Sen. Hon. Darren Henfield said the Free National Movement will call on the government to cap VAT collected on fuel. “Under this model on fuel adjusts downward so the government is not collecting a tax windfall of the backs of struggling families. It protects consumers and it keeps government revenue exactly where projections say they should be.”
The food items that will be zero rated include baby food, produce, meats, rice, flour and sugar.
