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FISCAL Update 2016 – Budget Measures

The Bahamas National Budget for fiscal year 2016/2017 has been presented to Parliament by the Rt Hon Perry G Christie, MP, Prime Minister and Minister of Finance and debate is underway. The national fiscal year runs 01 July to 30 June. The Budget debate opens annually on the last Wednesday in the month of May (i.e. Budget Day) and proposed Budget measures are debated in Parliament and voted on for passing before the end of June.

Key fiscal measures under debate for fiscal year 2016/2017:

 

Legislation Affected

Changes

1

Tariff/ Excise Act

 

·  Reduction or elimination of the duty on a number of household and grocery items, including appliances and parts.

· Elimination of duty on baby clothing, costume jewellery, perfumes and certain leather goods

· Reduction of duty on used clothing, computer peripherals, routers and related items

·  Reduction or elimination of duty on various building materials such as plywood, sheet rock, cement, roofing tiles and shingles, electrical wiring, marble and granite and other similar stones.

·  Expansion of concessions for light manufacturing

· Replacement of all remaining rates of duty of 7% with 5%

 

2

Real Property Tax Act

 

· Allow for the Real Property Tax concessions granted to residential properties during the last Budget to be extended to commercial properties with the exception of properties which are now subject to collection.

· Allow for the waiver of Real Property Tax arrears for owner-occupied properties with values less than $250,000.

· Allow for the Treasurer to accept property in exchange of outstanding Real Property Taxes on application.

· Allow for the Minister to provide customs duty and real property tax concessions to owners of dilapidated buildings in New Providence who intend to demolish and/or renovate these buildings for commercial, education and social purposes.

 

3

Value Added Tax (VAT) Act

 

· Exempt from VAT ancillary fees paid along with tuition fees.

 

· Adjust the date for the submission of VAT payments to 21 days after the end of the month, with effect from 01 January 2017.

4

Stamp Act

· Amend the Stamp Act so that “Transaction Values” are taken into account 1.

· Allow for waiver of Stamp Tax and VAT on Deeds of Exchange (due to an error in property description).

· Amend the Stamp Act to reduce rate of tax to 2.5% on marina slips.

· Allow Stamp Tax Concessions/Exemptions to be granted to first-time homeowners who may have missed the opportunity due to non-submission of documents for stamping.

· Provide a full amnesty on the surcharge which is now applied for late stamping of conveyances and other documents for 90 days and the application of fixed penalty of 10% of the applicable stamp duty thereafter.

 

5

Family Island Development Encouragement Act

·  Extended to 30 June 2017

6

City of Nassau Revitalization Act

·  Extended to 30 June 2017

 

7

Financial Administration and Audit Act

·  Adjust the requirement of the Tax Compliance Certificate to cover major shareholders with over 20% of the shares as well as companies with similar shareholders.

 

A full copy of the 2016/2017 Budget Communication can be found at:

http://www.bahamas.gov.bs/wps/wcm/connect/3da6c75f-489a-4eb8-9952-9336991b4507/OpeningBudgetStatement25May2016.%28v2%29PMREADINGFORMAT.pdf?MOD=AJPERES

For more information please contact our John K F Delaney QC or Samantha Knowles-Pratt at info@delaneypartners.com.

1 The ‘Transaction Value’ being defined as the value the property would fetch on the open market in a sale.

 

 

© Delaney Partners, June 23 2016.

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