Minister of State for Investments Khaalis Rolle said the imposition of a value-added tax (VAT) regime will not replace the incentives system the government uses to entice foreign direct investment, and assurances of this have so far been sufficient to keep investors at peace with the impending change in tax policy.
He said the government had been "very proactive" in taking the lead with discussions with investors directly and through industry groups like the Bahamas Hotel and Tourism Association.
"It's an ongoing conversation, but surprisingly it's a good conversation," he said.
"What we have tried to do is get concerns from investors regarding the impact of VAT on their particular type of business, and as it exists now, the rules of the game are pretty clear. Very few investors are overly concerned about how that's going to impact their investment. One question was whether that was going to replace the incentive regime that we currently have in place, and no, it won't. We will still offer the incentives that make us competitive as a destination for investment."
Rolle pointed out that Sandals had relocated its entire "back office" to The Bahamas, meaning that processing for all Sandals vacations is now taking place in The Bahamas. He said there had been concern about whether transactions passing through Sandals' system but not transacted within The Bahamas would attract a VAT, and the government was "able to address that for them".
"So we don't believe that there is any major outstanding issue with VAT and foreign direct investment," the minister said.

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