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Bahamas boosts tax-free shopping to counter VAT

The Bahamas has expanded a tax-free shopping scheme for tourists in order to remain competitive after the island-state introduced VAT at the rate of 7.5% last year. 

Travel Retail News
Thursday, April 7, 2016
Thursday, April 7, 2016
Kevin Rozario

Tax & Duty Free!!April 6, 2016 (Travel Retail News) – The Bahamas has expanded a tax free shopping scheme for tourists in order to remain competitive after the Caribbean island-state introduced VAT at the rate of 7.5% last year.

Cruise travellers, in particular, are able to choose from a number of Caribbean islands for duty free and travel retail shopping so the VAT addition was a gamble for the Bahamian government.

However, a deal struck between the country’s VAT and customs departments, and Switzerland-based tax refund specialist, Global Blue, has meant that over 60% of eligible Bahamian merchants are now signed up to give shoppers instant refunds.

Michael HalkitisMichael Halkitis, Bahamian Minister of State for Finance, says: “Following the introduction of VAT, we needed to ensure that the Bahamas continued to be seen as a competitive shopping destination. The new system has made tax free shopping easy and simple for retailers and the customs department – and therefore more available and accessible for tourists.”

The system introduces a standardised electronic platform to the tax refund process so that retailers can sell a range of products to tourists net of VAT. The purchases are recorded in standard format by retailers and then monitored electronically by the Customs Department.

This is an excerpt from Travel Retail News as it appeared on April 7, 2016. For updates or to read the current version of this post in its entirety, please click here.

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The Boards of Governors of the Inter-American Development Bank and the Inter-American Investment Corporation will hold their Annual Meeting in The Bahamas 7-10 April. This official gathering is a forum for discussion among the institution's governors, most of whom are Ministers of Finance, presidents of Central Banks, or other high-level authorities of the member countries. Representatives of multilateral financial institutions, development agencies, and private banks will also attend.

According to a recently released report from The Central Bank of The Bahamas, preliminary evidence suggests that the domestic economy continued to expand at a modest pace during the month of February, reflecting growth in tourism output, while foreign investment-led projects supported activity in the construction sector. Read or download the report here.

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