Wednesday, Jan 29, 2020
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BPL VAT exemption appears not as widely impactful as estimated

Far fewer people than originally projected have benefited from the government’s value-added tax (VAT) exemption on electricity bills, according to numbers released by Deputy Prime Minister and Minister of Finance Peter Turnquest.

During the 2019/2020 budget communication yesterday, Turnquest said that the once temporary measure has now been made permanent.

In November, the government made electricity bills $300 and lower VAT exempt after fuel prices pushed Bahamas Power and Light’s (BPL) fuel charge and electricity bills past the $200 exemption threshold.

Acting Financial Secretary Marlon Johnson said at the time that 63,000 of BPL’s consumers were expected to benefit from the exemption.

However, Turnquest revealed yesterday that as of March, just over 23,500 households benefited from the VAT exemption on BPL bills and water bills.

“You would recall that the government earlier in the fiscal year increased the VAT zero-rating on light bills from those under $200 to those under $300,” Turnquest said.

“It was approved as a temporary measure that was to expire at the end of June.

“I am pleased to advise that this higher ceiling has been made permanent, and customers will continue to enjoy VAT zero-rating on electricity bills under $300.

“Water bills under $50 per billing cycle will also continue to enjoy VAT zero-rating.”

The government increased VAT from 7.5 percent to 12 percent in July.

It had originally announced that electricity bills $100 or lower will be exempt from VAT, but later increased the ceiling to $200 after public outcry.

The fuel surcharge typically makes up the majority of electricity costs for the consumer. BPL claims it passes the charge directly to the consumer.

That charge has dropped slightly in recent months.

BPL’s fuel surcharge for the March billing period dropped below 19 cents per kilowatt hour (kWh) for the first time in more than six months.

During the March billing period, the fuel charge was 17.82 cents per kWh.

The fuel charge for April was 17.77 cents per kWh, marking a further drop.


Sloan Smith

Staff Reporter at The Nassau Guardian
Sloan covers national news for The Nassau Guardian. Sloan officially joined the news team in September 2016 but interned at The Nassau Guardian while studying journalism at the University of The Bahamas.
Education: Vrije Universiteit Brussel (University of Brussels), MA in Mass Communications

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