Mom and Pop Shops “Bracing” For VAT Slash

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NASSAU, BAHAMAS – Starting April 1st, 2025, Value Added Tax on uncooked food items will be slashed from 10 to 5 percent.

Prime Minister Philip Davis announced the decrease in January, saying the reduction will apply to a wide range of items available in food stores, including fresh fruits and vegetables, baby food, lunch snacks, and frozen foods.

And as the business community prepares for the adjustment, I stopped by Hadji’s Marketplace on St. Alban’s Drive, where owner Frantz Watkins tells me they won’t know the true impact until customers start buying.

Frantz Watkins – Owner, Hadji’s Marketplace
“I don’t see much of a difference. I mean, inflation is global, so we’re really just passing it on to consumers. As the middleman here, the process is just handed down. So, we’ll see, maybe we’ll have an impact. But if you ask me, people really need to prioritize how they spend their money.”

Watkins says it’s possible store owners may hike prices to make up for the slash, making everyday items on the shelves even more expensive.

While he says it won’t happen at his store, he understands why others may do it.

Frantz Watkins – Owner, Hadji’s Marketplace
“Now they are probably used to it, one or two complaints. But however the general public is bracing for it, I don’t see much of a difference. I don’t see many complaints every day.”

My next stop was Eagles Discount Wholesale and Retail, a small shop on Nassau Street.

Owner Zenia Lightbourne says her business doesn’t pay VAT because it doesn’t generate more than $100,000 a year. She sees the tax cut as a plus.

Zenia Lightbourne – Owner, Eagle Discount Wholesale and Retail
“So for us, right away that means a reduction in the cost of us bringing in our inventory. And what that also means, by extension, is we can pass those savings on to the consumer as well.”

While they’re business owners, they’re also residents and understand how the cost of living is impacting people’s pockets.

Zenia Lightbourne – Owner, Eagle Discount Wholesale and Retail
“Hopefully, that will mean a reduction in the cost of living for me as an individual, apart from the business. I also think it will help those who are less fortunate as well. It helps them to be able to afford to buy more, to feed their families, and look at a better quality of life.”

Frantz Watkins – Owner, Hadji’s Marketplace
“We have to have tax money coming in, so we can’t live tax-free on the land. I don’t see it being removed.”

Zenia Lightbourne – Owner, Eagle Discount Wholesale and Retail
“I think you have to be realistic about it. There are a lot of things that the government has to do on behalf of its citizens. There’s a lot of expense incurred in running a country, and so you have to be realistic.”