The Tribune

The Government is proceeding with its “targeted” reduction in Customs duties to accompany Value-Added Tax (VAT), a Cabinet minister has revealed, with more cuts to be triggered by enhanced revenue administration.

Michael Halkitis, minister of state for finance, was speaking on the sidelines of the Bahamas Institute of Accountants (BICA) Accountants Week conference amid queries over ‘double taxation’ and efforts to curb Customs duties.

Mr Halkitis said: “When we implemented VAT in January 2015, we reduced duties on approximately 130 items. We came back in July of that year and reduced duties on another 30 to 40 items.

“Just this year we came back with some further reductions. We are doing targeted reductions. We try to target things like food, appliances, building materials and that sort of thing which will impact the consumer.”

He added: “The reality is that for many years our revenue was something like 60-65 per cent Customs duties. The plan is that we tweak the system, bring more people into the net and as we improve our administration we can continue to bring down duties, but we have brought down a significant amount.”

Mr Halkitis said that from January 2015 to June 2016, VAT has brought in $852 million in revenue for the Government.

He said the Government’s revenue performance for the first quarter of the current 2016-2017 fiscal year had been broadly in line with projections, and exceeded last year’s comparative outcome.

However, that was before Hurricane Matthew.