The government on Wednesday tabled the highly anticipated value-added tax (VAT) legislation in the House of Assembly.

Parliamentarians are expected to begin debate on that bill in two weeks.

VAT will be introduced on January 1, 2015 at a 7.5 percent rate and the government is hoping to begin the registration process for businesses by September 1.

During an appearance on the TV programme, You & Your Money with host Jeffrey Lloyd, State Minister for Finance, Michael Halkitis stressed that many services will be exempted from VAT, including lending and savings products issued by banks, insurance companies and other financial institutions.

Education services and programmes leading to graduate and undergraduate degrees would also be exempt.

The Christie administration recently sought advice from New Zealand consultants who made several recommendations as to how The Bahamas should proceed with VAT.

“We are going to take on much of the recommendations of the New Zealanders. The New Zealand model is recognised as the best in the world in terms of VAT and in terms of simplicity effectiveness etc,” said Minster Halkitis.

The state minister also projected that VAT – when fully implemented – would yield about $300 million for the entire fiscal year.

The government, he said, wants to begin registering businesses by September 1.

The government has already allocated $3.5 million for VAT’s implementation. The money makes provisions for the creation of a task force and VAT education.

Businesses who fail to comply with VAT regulations could be imprisoned or face thousands of dollars in fines.

Halkitis On You & Your Money: You & Your Money host, Jeffrey Lloyd sits down for an interview with Minister of State for Finance, Michael Halkitis shortly after he tabled value-added tax (VAT) legislation in the House of Assembly. (Photo/Wendell Cleare for The Counsellors Ltd.)