VAT revenue up $50.6 mil. thanks to increase in rate to 12 percent
In the second quarter of the 2018/2019 fiscal year, value-added tax (VAT) grew by $50.6 million to $200.1 million as compared to the same quarter of fiscal year 2017/2018, thanks to the government’s 4.5 percent increase in the VAT rate to 12 percent last July, according to The Central Bank of The Bahamas’ (CBOB) Quarterly Economic Review report.
The report explains that the government’s overall tax revenue, comprising 86.7 percent of total receipts, increased by $60.7 million or 16.4 percent to $430.2 million thanks to the increase in VAT.
The report adds that stamp taxes on financial and realty transactions also show marked improvements, doubling to $53.3 million from $21.8 million.
“Measures to simplify the tax regime related to real estate transactions, eliminated the VAT off transactions with a compensating restoration in the stamp schedule to rates, which predated the January 2015 introduction of VAT,” the report states.
“In a partial offset, excise taxes fell by $17.8 million (30.9 percent) to $39.8 million.”
Information on the government’s other tax components showed that taxes on the use of goods moved from $15.2 million to $28.9 million, while “timing-related factors led to receipts from business licensing fees firming by $15.2 million to $18.0 million, due to a rise in collections from general business license fees”.
The report adds that company taxes increased only marginally by $0.5 million to $3.5 million, while motor vehicle taxes softened by $1.6 million or 18.1 percent to $7.2 million, and marine license fees declined by $0.4 million to $0.2 million.
According to the report, collections from specific taxes like gaming taxes declined by $2.1 million or 36.5 percent to $3.6 million.
Education: Florida International University, BS in Journalism