The Tribune

By ANNELIA NIXON

Tribune Business Reporter

anixon@tribunemedia.net

THE Department of Inland Revenue’s (DIR) VAT refunds as part of its first home construction and renovation programme is a “farce”, according to one frustrated Bahamian. 

The citizen, speaking anonymously, said DIR would no longer even talk to them, and they had to hire a lawyer or consultant to process the application. 

The individual said it was “absurd” that he had to “pay someone to get these government workers to do their job”. 

With a reduced VAT rate of 4 percent being applied to homes exceeding a value of $300,000, they stated that they paid the contractor’s construction VAT fees to the tune of $31, 850 - the full 10 percent VAT rate. Upon applying for the refund initiative, they were told by a representative at DIR that they would “withhold the 4 percent” and refund the remaining 6 percent. 

In an email dated June 24, 2024, as seen in an image shown to Tribune Business, a DIR employee said: “Your first home is valued more than $300,000.00. We appreciate that you would have paid your contractor VAT at the rate of 10 percent (10%) for construction materials and services rendered. Thus, in light of the above, we will withhold 4 percent (4%) of the VAT paid on construction and refund you the remaining 6 percent (6%).

“We will review the documents you sent to us last week and revert to you by the end of the week if not before.”

However, approaching a year later, the citizen said they still have not received the rebate and is still awaiting the status of their application.

They said: “Per the rebate programme, once I submit all of the required information, the government is supposed to keep four percent, which is $12,740 and give me back six percent which is $19,110. That is how the rebate programme is supposed to work per all of the publicly available information, ie VAT Act, First Time Home Owner VAT rebate guidance document etc… To date, the government has not refunded me anything. They owe me $19,110.”

They added: “The contractor could not charge me four percent. By law, he has to invoice at ten percent. So it comes down to a broken system on their end. They are not functioning properly if they cannot process a simple refund, even once given all the information they need.”

The government first announced the programme during the 2022-2023 Budget in the House of Assembly, promising a refund of up to $40,000 to Bahamians constructing or renovating their first home. The refund would stem from VAT paid on construction services or materials bought “once the occupancy certificate is provided within 18 months of the commencement of construction”. The individual received their certificate of occupancy November 16, 2023. A series of cheques were released to the contractor beginning October 19, 2022, with the final cheque and retention being released March 28, 2024. 

They said they called DIR on October 25, 2023, to inquire about the programme only to be met with an “interrogation” which they felt “sought to disqualify” them from the programme. However, they were successful in being moved on to the next step. They said they reached out to a DIR employee multiple times between late October and mid-December 2023,  to discuss what submissions would be needed for the application. They noted that a revised form was released to them on December 21, 2023, and they submitted a completed form to DIR on March 26, 2024.

They said during that timeline, they had a lot of communication with employees of DIR with some being “useless” and “brusque”. They added that on December 6 they received a call from DIR informing them that their application would be reviewed on December 9 and they would hear back on December 10 with an update. However, they said they have not gotten any calls back and their emails are no longer being answered.

“And by that point, nobody was emailing me,” they added. “Nobody was responding to anything. Nobody said anything. So I started begging people I knew who might have had contacts in the government. And I said, ‘could you just get an answer for me as to what’s going on?’” 

In December, the individual received a call and was reportedly told the application was “at the top of the pile”. However, they said no further call arrived. 

They said they received a tax assessment on March 7, 2025 “after numerous requests dating as far back as January 8, 2024 by my lawyer”. They said they paid a private consultant to get the assessment despite a DIR employee, visiting their home two weeks after the submission of their application in March 2024 “to take measurements etc”.

They said they were “at a point of frustration and desperation”, and called it “really humiliating to have to beg for this rebate”, saying they thought DIR staff had treated them with “extreme contempt”.