In its 2012/13 Budget Communication, the Government of the Bahamas announced a fundamental reform of the tax system. Part of these reforms would include the introduction of a Value Added Tax (VAT) as of 1 July 2014. The proposed VAT would be a 15% VAT that would apply to a broad range of goods and services. (Fifteen percent is the median rate in other Caribbean territories that have implemented VAT.) VAT would replace the Hotel Occupancy Tax, however a concessionary rate of 10% would be applied to hotels, including food and drink sold on their premises. A zero rate would be applied to exports and the international transport of goods and passengers. Exempt goods and services would include the following:
Food and agricultural products that benefit from duty-free status under the Tariff Act;
Other imports that benefit from the same, aforementioned status;
Health and education services;
Transfers of leases of land and residential buildings;
Social and community services.
A White Paper on the proposed value added tax was released on 14 February and is available at the following link: http://www.bahamas.gov.bs/wps/wcm/connect/8765bd53-8803-4bd2-9016-55932e7c4a72/white+Paper-+Tax+Reform.PDF?MOD=AJPERES