By RASHAD ROLLE
Tribune Staff Reporter
PRIME Minister Dr Hubert Minnis announced a new VAT policy for Abaco and Grand Bahama yesterday to assist with rebuilding efforts.
He was speaking at a town hall meeting on Green Turtle Cay where he also discussed plans to establish the Bahamas National Recovery and Reconstruction Trust Fund, which will be an independent non-political body to help fund home and building repairs. The development of the fund is included in the recently tabled Disaster Reconstruction Authority Bill.
The Office of the Prime Minister said the new VAT relief policy will exempt individuals and businesses from paying VAT on a range of items, including “unprepared food of all types, water, fruit and vegetable juice, clothes, shoes, hats, belts, stockings, gloves, scarves, cleaning supplies, beds and bedding material, hardware supplies, building supplies, landscaping supplies, pest control supplies, electrical fixtures and materials, electrical generators, farming equipment and supplies, fishing equipment and supplies, manufacturing equipment, cots, protective and safety gear, household furniture, furnishings and appliances, solar panels, mosquito netting, plumbing fixtures and materials, office supplies and equipment, tents, air-conditioning units and other equipment”.
The OPM said VAT on fuel for generators in areas without electricity will also be VAT free. An official said additional details will be announced. The new VAT policy will be in effect until June 2020.
Earlier this month, Deputy Prime Minister and Minister of Finance Peter Turnquest noted that the country would lose about $200m in revenue because of the storm, adding that the two islands represented between 15-20 percent of the country’s GDP. Last week Mr Turnquest foreshadowed efforts to amend the Value Added Tax (VAT) Act, 2014 to to permit the above exemptions.
In the aftermath of the storm, the government announced a series of measures to help residents, including extending a VAT credit of up to 50 percent on the sale of real property if the sale is immediately followed by material construction on or enhancement to the property. To maintain the credit, the qualifying activity has to commence within 75 days of the close of the sale and has to be followed through to scheduled completion or the full VAT becomes payable.
The government has also implemented a 90-day exigency order for the tax free import of medicine, medical supplies, building materials, bedding materials, mosquito netting, electrical and plumbing fixtures and materials, household furniture, furnishings, appliances, electrical generators and other items. This order is in effect until December 31, 2019.