Standard rate cut partially funded by removal of zero-rating on basics
The Caribbean Island of the Bahamas has agreed a 2% VAT rate cut from 12% to 10% by 1 January 2022. The VAT rate was raised from 7.5% to 12% in July 2018. VAT was first implemented in 2015.
The commitment came from the Prime Minister, Philip Brave Davis, this week in Parliament.
To help fund the cut, there will be a withdrawal of zero-rating on a range of supplies, although no change to the exemption on electricity. This will unwind some of the complexities introduced since the successful launch of a simple VAT regime six years ago.
Due to inflationary pressures, including ‘importing’ price rises from the US, a range of basic items will be exempted until 1 May 2022.
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