What is the outlook for government revenue?
Governments earn money by collecting taxes, administrative fees & fines, and receiving grants, donations, and loan proceeds. These are used to fulfil the Government’s social and economic objectives.
Government revenue has been negatively impacted by Hurricane Dorian and COVID-19. However, revenues are currently rebounding to pre-COVID levels as the global economy recovers and vaccinations increase. Similarly, domestic economic conditions are recovering due to increased tourism activity over the past nine months restoring government tax and non-tax revenue collections.
WHAT DOES THIS MEAN? This pie chart shows all of the Government's different sources of tax revenue. The Government generates the majority of its revenue through Value Added Tax (VAT) and from taxes on international trade and transactions, which includes all tourism related taxes (air departure, sea departure and plesaure vessels departure taxes)
WHAT DOES THIS MEAN? The pie chart shows the sources of all of Government's non-tax revenue. The Government generates the majority of its non-tax revenue in the form of Administrative Fees. Other major non-tax revenues include reimbursements through current transfers, rent, dividends and premiums, fees, & current claims.
WHAT DOES THIS MEAN? This table shows the amount of money collected by the Government each year in Value Added Tax (VAT) since the new tax was introduced in 2015. From its inception to present day, VAT has been one of the main sources of revenue for the Government. The significant increase in 2018/19 collections was largely due to the increase in the VAT rate from 7.5% to 12.5%.
How is Government revenue changing?
The Government reduced the Value Added Tax (VAT) rate from 12% to 10% to provide broad relief while stimulating the economy-- keeping more money in the pockets of Bahamians. The reduced tax rate was accompanied by the removal of zero-rating on a variety of items to broaden the tax base and ensure those who can pay do pay their fair share.
Click the slider for more information on Government revenue performance over the period.
Click the links to download the full list of tax changes.