The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

DEPUTY Prime Minister and Minister of Finance Peter Turnquest announced a number of tax reductions and eliminations during his budget communication yesterday.

Value added tax (VAT) would be eliminated on medicines and residential property insurance, he said.

The tax will also be eliminated on residential electricity bills less than $100 and water bills less than $50, changes he claimed will impact 30,000 Bahamas Power & Light (BPL) customers and about 43,000 Water & Sewerage (WSC) customers.

VAT will also be coming off breadbasket items, including butter, cooking oil, mayonnaise, grits, cheese, corned beef, evaporated milk, margarine, rice, flour, bread, tomato paste, baby cereal, baby formula, soup, broths, baby good, powdered detergents, condensed milk, soaps, fresh milk and mustard.

Mr Turnquest said VAT on fundraising activities of charitable organisations will be zero-rated.

The VAT changes brings the administration closer to fulfilling some of its pre-election campaign promises, though it still has a way to go.

Prime Minister Dr Hubert Minnis promised over the years to repeal VAT on breadbasket items, all baby and children’s clothing, electricity, water, all health coverage and insurance.

Nonetheless, Mr Turnquest announced that the personal travel exemption Bahamians will have on custom duties will increase from $300 to $500 twice a year.

In a major move for shoppers, he also revealed Bahamian-based businesses will no longer have to pay duty for imported clothing and footward.

“We are providing for the waiver of duty on clothing and shoe imports upon application by importers and retailers of same,” he said.

“This will be extended to any merchant, large or small, who has a business licence for the sale of clothes or shoes. This will be a benefit to all Bahamians, but particularly to those who do not have the means to travel abroad to shop for their clothes like others are sometimes able to do.”

Mr Turnquest pointed out this exemption would not apply to online businesses operating here but importing goods from abroad.

He said: “We are providing duty-free entry for goods for use in the commercial printing industry, as well as for processing and garment manufacturing equipment without the need to apply for specific concessions as before.”

Custom duties will also be eliminated on whole salmon, frozen fish fillets, bread spreads, potato products, tofu and prepared and preserved tomatoes. “We are eliminating duties on solar kits upon application to the Ministry of Finance,” Mr Turnquest said.

“Presently solar panels are duty free, and this new allowance will mean that vendors or individuals who are bringing in full solar kits can have all related elements brought in duty free. We are reducing duties on floor tiles and fabric softener. We are providing an exemption from Business Licence fees for all schools that are registered with the Ministry of Education; and we are eliminating the duty on airplanes and helicopters in an effort to build an airplane registry industry within the country.”

Custom duties on new small vehicles will be reduced to 25 percent as well.

A number of changes were announced to encourage a reduction in the country’s dependency on fossil fuels.

“We are reducing the excise duty on electric and hybrid vehicles valued at $50,000 and under down to 10 percent,” Mr Turnquest said.

“We are reducing the excise duty on electric motorcycles down to 10 percent; we are reducing the excise duty on new smaller vehicles up to 1500cc in engine size down to 25 percent; for clarity this applies to new vehicles only. We are reducing the excise duty on rechargeable batteries, other than conventional car batteries, down to 10 percent; and we are increasing the environmental levy on all vehicles from $200 to $250.”