The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Davis administration yesterday blasted suggestions that the average Bahamian family will only save $11 per month from eliminating VAT on all unprepared food.

Hitting back at claims that its latest tax relief move, initiated ahead of the upcoming 2026 general election, will have minimal impact on the high cost of living for most Bahamians, the Office of the Prime Minister said the ultimate savings per household depends on how much food they purchase and consume.

It said in a statement that all households will “see relief” as a result of the complete removal of VAT on all grocery items sold in food stores from April 1, 2026 in a bid to ease persistent cost of living pressures.

“Beginning April 1 this year, VAT will go down to zero for unprepared food sold at the food store. How much your family will save depends on what you buy and how it was taxed previously. All Bahamians who buy food at the market will see relief,” said the Office of the Prime Minister’s statement. 

It was alleged that the average Bahamian household would save about $11 per month from the upcoming VAT cut on unprepared food, using a calculation that divided the Government’s estimated $15m revenue loss by the number of households in The Bahamas.

However, the Government said this figure is misleading as the $15m represents the net fiscal impact to the Public Treasury after accounting for business credits and other adjustments, not the total amount Bahamians will save at the food store check-out. 

“The Nassau Guardian this morning committed a miscalculation in their front-page story and headline, with an erroneous claim that the average household will save $11 a month after the April 1 VAT cut,” said the Office of the Prime Minister said.

“The Guardian mistakenly equated the fiscal impact of the VAT cut - a $15m revenue loss - with the consumer benefit. The Government’s $15m is a bottom-line fiscal impact number after accounting for business credits and substituted spending.

“The total dollars left in Bahamian pockets at the grocery store check-out gross relief will be the sum of VAT removed from the final retail price of all food sold, which is a significantly larger pool of money.”

The Opposition has also criticised the Davis administration’s complete removal of VAT on all food, excluding hot or ready-to-eat meals, branding the concession “April Fools’ economics”. 

Opposition leader Michael Pintard said the Davis administration’s latest cost of living measures are politically motivated and long overdue.

“With only months left in a five-year term, and in the face of his imminent political retirement, Prime Minister Davis delivered a national address that relied more on performance than proof,” said Mr Pintard.

 “What was presented as reassurance amounted instead to smoke and mirrors, a package of shameless campaign cuts designed to distract a frustrated and increasingly impatient nation, rather than confront the real cost of living pressures Bahamians face every single day.

“If these measures were truly essential, Bahamians would not have had to wait almost five years to see them,” Mr Pintard said, adding that the FNM has consistently called for VAT relief on food and essential items since 2021.