During the Budget Communication 2017/2018 in the House of Assembly, Wednesday, May 31, 2017 Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest listed the various revenue measures that will be undertaken by the Government and which will have a direct impact on the Government’s projections for Recurrent Revenues in the future.
The revenue measures, he said, were designed to: provide prompt effect to some of the Government’s commitments to Bahamians; provide further tax relief to consumers and businesses through customs and excise duty rate reductions; and enhance administration and compliance in respect of major taxes.
He continued: “Needless to say, the extent of tax relief that we are responsibly able to announce at this time is severely constrained by the very grave fiscal position that we have inherited from the previous Administration.
“The implementation of the other tax relief commitments in our Manifesto must therefore be deferred until we have succeeded in putting in place the measures that will result in a more sustainable fiscal structure that leads to the elimination of deficit financing and a lower burden of debt.”
The DPM explained as for the measures that respond immediately to its commitments to citizens and businesses the Government will reduce the rate of Business License tax from 1.5 per cent to 1.25 per cent of turnover and, for hotels with turnover exceeding $400 million, from 1.25 per cent to 1 per cent of turnover, the latter to follow through on a commitment of the previous Administration to Brookfield, the owners of Atlantis.
He said this arrangement also calls for further reduction in their business licence fee in the next year and reductions in duty on salmon and shrimp.
The Government will extend the City of Nassau Revitalization Act for a further year, to June 30, 2018 and extend the Family Island Development Encouragement Act for a further year, to June 30, 2018.
The DPM said in order to facilitate access to medical supplies and equipment, the Government is eliminating Customs duties on products such as X-ray machines and parts; breathing apparatus and masks; ophthalmic instruments and appliances; blood grouping reagents; nutritional preparations for tube feeding; dental cements and fillings and bone reconstruction cements; medical gel; sterile tissue adhesives; and parts for carriages for disabled persons.
Further Tax Relief Measures
DPM Turnquest said within the measures that the Government is implementing to provide further tax relief to individuals and businesses, it is eliminating or reducing import duties on a number of food and beverage products.
These include milk, yogurt and ice cream; bread, cakes, pastries and chips; salmon fillet; shrimp and prawns; pastas and pizza sauce; fruit drinks; canned or preserved vegetables; jams, fruit jellies and marmalades and fruit or nut purees; mixtures of fruits and nuts; and soy sauce.
It is eliminating or reducing import duties on a number of personal care and other personal products, as well as household items, including shampoo; hair products; soap; toilet tissue; low-flow shower heads; sunglasses; exercise and gym equipment; clothes hangers; shoe parts; water heater parts; sound and video equipment parts; microphones; massage apparatus; fans and air purifiers; toys; primary cell batteries; lead acid accumulator batteries; rodenticides and insecticides; and tires and inner tubes and paints.
He said the Government will get rid of or reduce import duties on a number of building materials, including: sheets of veneers; wood flooring of various materials; wooden forms for concrete pouring; wooden posts and beams; asphalt shingles; Durock and cement panel boards; and other cement panels and sheets; x we are reducing the excise duty on electric motorcycles, from 65 per cent to 25 per cent.
The Government is providing duty exemption on equipment and machinery specifically designed for ground repair, maintenance and service of cruise ships and sea vessels that conduct domestic and international travel, and is providing duty exemption on imported original artwork, once approved under the conditions outlined by the National Art Gallery.
Enhancing Tax Administration and Compliance
DPM Turnquest also explained that the Government will introduce measures that seek to enhance tax administration and compliance, thereby secure Government revenues. “Specifically, we are amending the Customs Management Act to add definitions in the Interpretation Section of the Act to better accommodate a paperless Customs process,” he said.
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