The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Financial Secretary in the Ministry of Finance John Rolle said yesterday that great progress had been made in terms of helping the Bahamian insurance industry transition to the Value-Added Tax (VAT) regime.

Speaking at a press conference yesterday Mr Rolle said: “For the insurance sector we had the luxury with interacting with the insurance companies during the period particularly from January to present when most of the other stakeholders didn’t require that much attention.”

He added: We’re happy in terms of the amount of work we have done to help the industry transition. There has been some back and forth on some issues but generally speaking we have made great progress in terms of guidance notes and understanding what is going to happen, the policies and people transitioning into the transition state.”

The Christie administration’s VAT policy towards the insurance industry has changed at least twice. It was first proposed that the sector be subject to VAT when the 15 per cent rate was unveiled, only for the Government to then reverse course and deem it exempt from the tax. Finally, following the advice received from its New Zealand consultants, the Christie administration performed another “u-turn” and decided that insurance would, after all, be subject to VAT at the 7.5 per cent rate.

All insurance products will be exempt from VAT until July 1, 2015, after which life insurance, annuity insurance and savings plans will remain exempt. Underwriting and reinsurance services relating to these services will similarly be exempt, along with any associated broker or agent fees. However, the services of an insurance actuary or adjuster are subject to VAT.

Non-life insurance services, including property, health and casualty insurance will be subject to the standard 7.5 per cent VAT rate after July 1. Insurance services supplied to persons or businesses outside The Bahamas are normally zero-rated.