Bahamas’ VAT Slash ‘Not Reckless’ As Revenues Up US$160Mn

• The Ministry of Finance’s top official yesterday said the VAT rate cut “is not a reckless, populist act” as he revealed the Government has outperformed first-half revenue targets by US$160Mn. 
• Simon Wilson, the financial secretary, defended the two-percentage-point rate slash as “a measured act to improve the livelihoods of ordinary Bahamians” that will have a “neutral to slightly” positive impact on government revenues during the second half of the 2021-2022 fiscal year. 
• “Based on all the calculations, this reduction is going to be revenue-neutral and slightly positive in terms of revenue yield,” he told a press briefing at the Prime Minister’s Office. “It’s not going to increase the fiscal deficit. This is not a reckless, populist act.” 
• Wilson declined to give figures for the estimated revenue and deficit impact as a result of cutting the VAT rate from 12 percent to 10 percent. However, he said the Government’s revenue performance had continued to maintain the 2021-2022 first-quarter trends where they were $92Mn ahead of forecast.

 (Source: The Tribune)