PM Outlines New VAT Cuts and Customs Exemptions

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NASSAU, BAHAMAS – The Davis-administration is looking to bring relief to Bahamians with an expanded list of value-added tax cuts and customs duty exemptions ranging from baby diapers and medication to cement nuts and bolts.

He revealed the tax cuts as he delivered the 2025/2026 budget communication.

The PM said the expanded list that’s set to take effect in September is a broader commitment to build affordability and resilience.

Philip Davis – Prime Minister

“These reductions, that will take effect on September 1, 2025, are aimed at ensuring that Bahamians of all ages and stages of life can access essential products.”

The upcoming fiscal year will bring a list of value-added tax cuts and the expansion of the custom duty exemptions, while delivering the 2025/2026 budget communication in parliament Wednesday, Davis said the VAT cut is part of ongoing effort to promote affordability.

The VAT rate will be cut to 5% on the following items according to prime minister Davis; baby diapers, depends, feminine hygiene products, prescription and non-prescription drugs.

Medical and dental supplies and other medical and therapeutic items are also on that list. 


The amended VAT act will also see VAT relief on building materials for religious institutions, recognizing their vital role in supporting and uplifting communities.

Davis explained the relief will come in the form of VAT exemption on imports or as a refund system if purchased locally and while the government is handing out VAT cuts, customs duties are also being removed from digital and changeable letter signs, among other things.

Philip Davis – Prime Minister

“Refractory cement, mortars, and concrete, and similar compositions; copper fittings; screws; and nuts and bolts.”

Philip Davis – Prime Minister

“Further to this, duty on the following items is being reduced: cleaning products; electric or battery-operated shavers; juice extractors; trucks weighing 20 tons and above; and filters of all kinds, from water to air conditioning filters.”

Duty exemptions will also be placed on household appliances with the highest level of energy efficiency.

It’s all in a hope of encouraging Bahamians to adopt cleaner technologies, directly contributing to climate goals.

The Davis administration is also reducing the cost of fuel sources used by many households.

The 45% excise duty on butane fuel will also be removed.

Philip Davis – Prime Minister

“Many Bahamians rely on this fuel for a hot meal, whether day-to-day or during emergencies. This is part of our broader commitment to build resilience and affordability into everyday life, especially where it may help the most.”