I spent hours writing an article on it last week. The VAT was supposed to replace the high import
duties when it was proposed at 15% – now, at 7.5%, it's not. And you will pay VAT on top of the import
duties (including on the amount of the import duties). But only if you are paying for goods or services from a company that is...wait, I'll just post my article:
The new Value Added Tax bill passed last week with a vote of 22-8 in the Bahamian Parliament.
A 7.5% tax will be collected at point of purchase
for almost all goods and services starting January 1, 2015, unless changes are made before then. The tax was originally supposed to be implemented in July 2014 at a 15% rate with some exceptions, including 10% for tourism activities, but that plan changed in May.
So, will you be paying a 7.5% tax on everything you buy in the Bahamas? No. Medical
and educational services are exempt, and one source includes "basic breadbasket items" in the exemption list (I didn't find that it at other sources or in the most recent copy of the regulations
). To further confuse the issue, only businesses with sales of $100K or more are allowed to register to collect the VAT – businesses with sales below $100K will collect 0% (unless they are unscrupulous).
Confused? If you cruise
the Bahamas this winter, you won't be the only one – collecting tax is brand new for Bahamian businesses. The "shelf" or "menu" price
should be the total price
you pay, according to current
provisions (it includes the VAT if the business collects it). Businesses that collect VAT should include the VAT amount and its tax ID on your receipt, and should have a VAT registration
certificate prominently displayed along with its business license
. (You can also check the VAT register that will be on the Ministry of Finance’s Website
and all other Government websites.)
Will something change before we cross the Gulf Stream
? Probably...this has been a "moving target" for years now.
Will cruising the Bahamas become more expensive? The original VAT proposal was designed to eliminate the high import duties (just about everything is imported); however, in the new regulations
with the lower 7.5% rate, most imports will still have import duties as well. Yes, expect to pay a bit more for everything to help get this island nation out of its deep fiscal hole (if they manage to efficiently collect it and use it to pay down its debt, of course).
Will the Bahamas still be a great place to cruise
? Absolutely! Don't forget: You'll still be able to bring in all the "ship's stores" you can cram into your boat without paying any tax or duty on it – unless of course, they change that law...stay tuned!