Business

PM announces tax breaks to help lower cost of living

Budget provides for reduction of customs duty on a significant number of food items

Prime Minister Philip Davis announced yesterday a number of tax breaks for certain foods, building supplies and electric vehicles, among other things, that he said would assist in lowering the cost of living for Bahamians.

Bahamians in recent months have complained about the heavy toll of rising prices on their pockets.

The International Monetary Fund has projected that The Bahamas will experience a 7.3 percent rise in inflation this year, as a result of the COVID-19 pandemic and the rising cost of oil induced by the war in Ukraine.

Davis said to this end, the 2022/2023 budget provides for the reduction of customs duty on a significant number of food items, to bring relief to citizens and residents.

“You will hear more about it during the debate. We also recognize that an important part of our tourism experience is our unique culinary products, and we need to ensure that the sector remains competitive. We have also, therefore, reduced the duty on food items used mostly in the restaurant and tourism sector,” he said during his budget communication in the House of Assembly.

“Among the list of foods are those produced locally, such as chicken parts. Local production of chicken is less than five percent of total consumption, but we want and need to expand local production of all agriculture products. In this regard, the government will provide support to local poultry producers by assisting in lowering the cost of electricity, one of the primary inputs in organized poultry production. This support is in addition to the increased support being provided by the Ministry of Agriculture and other agencies.”

Additionally, the government intends to reduce the duty on roofing materials, plumbing materials and electrical supplies.

“This will make it more affordable for everyone in The Bahamas to undertake any construction project. We have also reduced the duty on electric cars with a value of under $70,000 to 10 percent. For vehicles over $70,000 the duty will be 25 percent, the same framework that presently exists for all hybrid cars. These duty adjustments are part of a deliberate strategy to reduce nationally our carbon footprint,” Davis announced.

He added, “We have eliminated import duty on lithium ion and lithium phosphate batteries. These batteries are predominantly used for renewable energy. We have also simplified the process for bringing in renewable energy parts.”

Other highlights of yesterday’s budget communication include the government’s announcement that it intends to borrow $690 million. In the 2022/2023 fiscal year, it is projecting a deficit of $564 million.

Total government debt is projected to hit $11.6 billion in the 2022/2023 fiscal year, equating to 87.5 percent of gross domestic product.

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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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