Bahamas Hopeful For Stronger Finances With New VAT
by Mike Godfrey, Lowtax.net, Washington
24 February, 2015
The Prime Minister of the Bahamas, Perry Christie, has expressed optimism that the nation's finances will improve following the introduction of a value-added tax (VAT) in the territory at the beginning of the year.
In addition, he cited a revision to the International Monetary Fund's economic outlook for the US as a factor. In a mid-year budget statement on February 11, Christie said: "The latest IMF forecast calls for a significant upward revision to the near-term outlook for the US economy." He said that this bodes well for the territory, given that the US is the Bahamas's most significant trading partner and source of tourism dollars.
"As a result of all this new economic resurgence in the Bahamas, employment conditions in the Bahamas are expected to improve steadily both this year and beyond," he stated.
The IMF projects real growth for the Bahamas of about two percent this year and next year. "I should add that I now see this forecast as somewhat conservative in light of the fact that the IMF has more recently boosted its growth forecast for the US economy to an appreciable degree," said Christie. "As a result, our own growth prospects may be even better than last projected by the IMF."
The Bahamas's new value-added tax (VAT) regime, featuring a 7.5 percent headline rate, was introduced in the territory from January 1, 2015.
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