Special economic recovery zone tax breaks outlined
The special economic recovery zone (SERZ) order for the islands impacted by Hurricane Dorian will come into effect on December 1 and will expire on June 30, 2020. It will cover six main tax benefits for individuals and businesses disadvantaged by the Category 5 storm on Grand Bahama, Abaco and the surrounding cays.
During a press conference yesterday, Acting Comptroller of the Department of Inland Revenue Gaynell Rolle said the tax breaks relate specifically to goods and do not include services. They will be applied at the borders, at cash registers and at the tax agencies within the SERZ.
The tax benefits include the tax-free importation of goods directly into the recovery zones, which applies to cargo directly imported into Grand Bahama, Abaco and the surrounding cays; value-added tax (VAT)-free purchases of goods inside the recovery zone; duty-free and VAT-free replacement of vehicles and boats; relief from paying all business license fees; relief from paying real property tax on improved property and not vacant land; and discounted VAT on the sale of real property.
“These tax breaks will allow individuals affected by the catastrophic Hurricane Dorian to rebuild their lives more affordably and with greater speed. They include a wide range of items, from building supplies, to furniture and office equipment, to fishing and farming supplies, medicine and personal hygiene products. The list also includes water, fruit and vegetables and other unprepared and prepared food, including food sold at restaurants. Indeed, if you have no stove to cook on, you can eat takeout and save on VAT,” Rolle said.
“At the cash register in Abaco and Grand Bahama, consumers will effectively pay no VAT on most items available locally. They do not have to apply for approval because these purchases are made directly within the zone. Consumers can just shop within the recovery area and approved items will be VAT-free at the cash register.”
Individuals and businesses wanting to benefit from the tax breaks to directly import cargo at the borders within the economic zones would have to be approved by the government to do so.
“I want to emphasize that pre-approval by the Ministry of Finance and the Department of Inland Revenue is required for presentation at the border. The process requires individuals and businesses to complete the tax relief consolidated form. In Abaco, the form can be submitted to the Hurricane Dorian one-stop shop at the government complex. In Grand Bahama the form can be submitted to the Department of Inland Revenue. Once certified, this form is presented to customs for the tax waiver,” Rolle said.
Category 5 storm Dorian – the strongest on record to hit The Bahamas – impacted 29,472 people when it ravaged Abaco and Grand Bahama in early September.