Tracking the Cost of Living and Vat Changes Ahead of Election

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NASSAU , BAHAMAS – The cost of living in The Bahamas remains a major concern for many residents, with Value Added Tax at the center of that discussion—a key driver of what consumers pay at the register.

Introduced in 2015 at 7.5 percent, VAT was later increased to 12 percent before being reduced to 10 percent by the Davis administration in 2022.

In addition to the VAT cut, the Davis administration had also removed or reduced duties on select items, including unprepared food items as of April 1st.

Michael Halkitis – Minister, Economic Affairs

“As long as the Progressive Liberal Party is in power, VAT on groceries will be zero.”

Michael Halkitis – Minister, Economic Affairs

“This is a continuation of our commitment that began even before the election, so it is not timed to coincide with any upcoming election due within a year, but a continuation of our stance on reducing VAT on food. I would say that, in meetings with the Prime Minister and the technical team from finance, the Prime Minister indicated from three years ago that he wanted to move toward the total elimination of VAT on food.”

The administration maintained these moves are part of a broader effort to bring relief.

On the ground, reactions are mixed on VAT and the cost of living.

Tony Thompson – Shopper

“The small five cents and things like that are not doing anything for anybody’s life—it is not making a difference. So you think the tax is actually necessary for the country? Yes, the tax is necessary, because the government has a lot of things they could be doing, and a lot of things need to be done.”

Opposition Leader Michael Pintard has made the cost of living a central campaign issue, arguing that the government’s relief measures have come too late and have not gone far enough after years of rising prices, while outlining what his government would do if elected.

Meanwhile, earlier this year, international financial watchdogs like the IMF suggested the country may need to consider raising revenue, including possible VAT adjustments.

But Prime Minister Philip Davis has pushed back.

Now, the PLP has defended the pace of its progress, arguing the Davis administration has been focused on fixing long-standing issues left behind.

Chester Cooper – PLP Candidate, Exuma

“We secured Celebration Key, the Freeport Harbor Cruise Port deal, and the MSC Beach Club—that is jobs and opportunities. We ensured the shipyard is getting the largest floating dock in the hemisphere, and your international airport is fully funded and moving forward.”

Philip Davis – PLP Leader & Candidate, Cat Island, Rum Cay, San Salvador

“The FNM left mess after mess after mess—the biggest messes I have ever seen—and we have been cleaning it up. We have been cleaning up their mess. Now they have the nerve to complain that we are not cleaning it up fast enough—that is what the complaint is about.”