Deputy Prime Minister and Minister of Finance Peter Turnquest said yesterday the government intends to amend the Value Added Tax (VAT) Act, 2014, to ensure exemptions for residents on Abaco and Grand Bahama following Hurricane Dorian.
“The initial order was given through the exigency order which would’ve given the authority,” Turnquest said.
“We will likely have to come to amend the VAT Act to give a full effect to the long-term plan with respect to that in particular.”
Days following the passage of Dorian, the government implemented a 90-day exigency order for the tax-free import into the affected islands of medicine and medical supplies, building materials, bedding materials, mosquito netting, electrical and plumbing fixtures and materials, household furniture, furnishings and appliances, electrical generators and other items.
On Wednesday, the government extended the order to December 31, 2019.
Yesterday, Turnquest said the VAT amendment will aim “to provide for the waivers that are covered by the exigency order at the moment”.
“The VAT Act is very limited to opportunities for exemptions, for the minister to exercise discretion,” he said.
“The bill passed yesterday gives the power notwithstanding the act to exempt any taxes. So, we’re now going to likely amend the VAT Act to give further effect to these exemptions that we are contemplating right now.”
The deputy prime minister said the government has yet to determine how long the exemptions will last in the proposed amendment.
“The legal aspect, I’m reluctant to comment on,” Turnquest said.
“It’s not my field.”
Turnquest’s comments come one day after Progressive Liberal Party (PLP) Deputy Leader Chester Cooper called on the government to make areas affected by Dorian VAT free.
On Wednesday, during a contribution in the House of Assembly, Cooper said, “If Abaco and Grand Bahama are now tax-free zones for three years, though I have yet to see that legislation in this place, then why are you asking them to pay taxes? It is madness. They have no money to give you.”
Dorian – the strongest storm to hit The Bahamas – devastated parts of Abaco and Grand Bahama in early September.
The storm left thousands displaced, hundreds missing and at least 65 dead.
In the immediate aftermath of the storm, Prime Minister Dr. Hubert Minnis announced that the affected islands would become special economic recovery zones.