- The Prime Minister announced a crackdown on VAT deductions for construction projects over $1m to protect the Public Treasury.
- Private companies and homeowners not in real estate development have benefited from VAT deductions at taxpayers’ expense.
- New rules will prevent claiming VAT deductions for major construction projects unless involved in real estate sales.
- Real estate developers can still claim VAT credits if costs are tied to taxable sales.
- The VAT Amendment Bill restricts VAT input deductions for major construction unless involved in taxable property supply.
- Major construction is defined as projects worth $1m or more, including dredging, land reclamation, and infrastructure improvements.
- Bahamian businesses may face increased construction costs due to the inability to reclaim VAT on input costs.
- The move is seen as a disincentive to growth, investment, and construction activity.
- Two new Bills were tabled, including one to create the Maritime Revenue Unit and another to amend the Central Bank Act.
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
