Business

Long-awaited VAT holiday to begin next week

As parents and teachers anxiously prepare for the reopening of school next month, the majority of which will be held virtually, the Ministry of Finance yesterday announced the long-awaited back-to-school VAT (value-added tax) holiday will span the first three weeks of September.

It’s an extension of the originally proposed two-week VAT holiday that was announced during the 2020/2021 annual budget in May and now also includes supplies needed to assist with virtual learning as well as locally purchased school supplies, including school uniforms, clothing, backpacks, electronic book readers and school snacks.

Deputy Prime Minister and Minister of Finance Peter Turnquest noted that the purpose of the tax break is to make back-to-school shopping less expensive for parents while providing support to local businesses.

“While the country grapples with the ongoing health and economic crisis, the government will continue to find ways to reduce the financial strain on families and businesses and provide support where we can. With the VAT holiday on school supplies, parents and teachers will be able to find some financial relief as they prepare for the reopening of school,” he said in a statement yesterday.

“Even with the tax breaks, many people will still need the support of the broader community, so we continue to encourage and celebrate those who have been rallying together to support their neighbors, family members, friends and even strangers.”

The tax exemption will only apply to items that are bought inside the country and not those that are imported directly into the country.

Acting Controller of the Department of Inland Revenue (DIR) Gaynell Rolle said her department will be working with businesses throughout the country to administer the tax relief measure.

“The Department of Inland Revenue will work with businesses to ensure this tax relief initiative is delivered smoothly,” she said.

“All merchants who are VAT registrants and are licensed to sell back-to-school supplies will be required to participate. Consumers will benefit from the VAT savings at the cash register.”

Also speaking to the tax break, Minister of Education Jeffrey Lloyd said special consideration was made considering that schools are reopening using virtual platforms.

“Naturally, there are learning tools required for remote learning that were not necessary for in-person learning,” he said.

“The government has ensured that the VAT holiday covers traditional school supplies, such as notebooks, folders and other stationary; and digital learning tools such as personal computers, tablets and other related accessories.”

The back-to-school VAT holiday will run from Monday, August 31 to Sunday, September 20, 2020.

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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