The Tribune

By JADE RUSSELL

Tribune Staff Reporter

jrussell@tribunemedia.net

ECONOMIC Affairs Minister Michael Halkitis acknowledged yesterday that while the government’s newly announced Value Added Tax (VAT) exemption on unprepared foods sold in stores is a positive step, the high cost of living can only be meaningfully reduced by increasing local production rather than relying heavily on imports.

Mr Halkitis, speaking during an Office of the Prime Minister briefing, said the cost of living remains too high. He acknowledged progress in improving the economy but noted that some Bahamians are still not feeling relief.

His comments came after feeding organisations and business leaders welcomed the removal of VAT on unprepared grocery items from five percent to zero, effective April 1. However, many have said the measure on its own is insufficient to address food insecurity or ease broader cost-of-living pressures.

The minister said greater investment in agriculture is needed to increase the amount of food grown locally instead of relying on imports. He also suggested diversifying shipping options and reducing the role of intermediaries to help lower costs.

“The stubborn thing is that if you follow the international news it’s the same thing, you know, our brothers in the US are complaining about the cost of living and the price of food,” he said. “If the price is going up there, you’re paying a higher price for it there.”

He added that significant work is still required to bring down the cost of living.

Hands for Hunger executive director Keisha Ellis said about 5,000 people were registered with the organisation’s pantry during 2024–2025. That number has since grown to roughly 7,000 families, though she said the organisation has not been able to identify a single cause for the increase.

While advocacy groups say the VAT exemption taking effect on April 1 will provide meaningful relief, they argue the scale of need extends far beyond what tax relief alone can address.

Bahamas Feeding Network executive Nicolette Fountain Archer said the organisation welcomed the VAT removal, noting that any reduction in food costs benefits vulnerable families and charities that purchase food in bulk. She said the change is expected to stretch the network’s budget by about five percent.

“However, the reality is that this measure alone does not significantly dent the level of food insecurity we see on a daily basis. The need has grown well beyond what a VAT reduction can address. Rising food prices, utilities, housing costs and transportation expenses continue to place enormous pressure on families, many of whom were already struggling before these increases,” she said.