Minister of State for Grand Bahama Kwasi Thompson said yesterday that, on average, 90 percent of Grand Bahama Power Company’s (GBPC) residential customers will benefit from the government’s exemption on value-added tax (VAT) for electricity bills $300 and lower.
Last week, Parliament passed an amendment bill to raise the VAT exemption on electricity bills from $200 and under to $300 and under from November 2018 to July 2019.
The amendment will be retroactive.
As he expressed support for the bill, which was being debated in the Senate, Thompson said, “On the island of Grand Bahama, we have a private company, Grand Bahama Power Company, that provides our power, and we have had our share of challenges.
“In 2012, our fuel charge went as high as 20 cents. We pay half of that today.
“The Grand Bahama Power Company took the critical step to hedge the fuel cost, which locked the fuel charge at 10 cents for the next few years.
“… However, what is actually good is that Grand Bahamians will still benefit from this initiative, as even more persons will access the VAT-free exemption.
“So in July when the VAT-free exemption was first implemented, I was informed by the power company that, on average, 74 percent would benefit from the $200 threshold.
“I am now advised by Grand Bahama Power Company that, with the $300 VAT exemption threshold, more than 90 percent of Grand Bahama Power Company’s customers will be exempt from VAT on their electricity bill.”
The exemption comes amid concerns over the high cost of electricity on New Providence and on other islands.
Bahamas Power and Light (BPL) officials said this is due to higher oil prices.
According to Public Works Minister Desmond Bannister, 64,085 Bahamians had electricity bills $300 and lower in October and will likely benefit from the exemption.
The average residential light bill in The Bahamas increased by 45 percent between October 2017 and October 2018, according to data provided by BPL.
In September, there were three fires that impacted BPL’s Clifton Pier Power Plant. The fires caused damage to station C, which houses two of the largest generators at the plant.
The fires prompted BPL to load-shed throughout New Providence.
The damage caused a spike in consumer bills as the electricity company continues to grapple with generation issues, according to officials.