NASSAU, BAHAMAS – Economic Affairs Minister Michael Halkitis has declared that a zero Value Added Tax (VAT) rate on all unprepared grocery items will become a permanent fixture if the ruling Progressive Liberal Party (PLP) retains power following the upcoming general election. The announcement came during an Office of the Prime Minister press briefing where Halkitis emphatically stated, ‘As long as the Progressive Liberal Party is in power, VAT on grocery will be zero.’
The minister’s comments addressed mounting speculation about whether the administration’s recent VAT elimination—reducing the tax from five percent to zero—represented a temporary measure or enduring policy. Halkitis positioned the move as part of the government’s broader tax reduction agenda and ongoing initiatives to alleviate the nation’s high cost of living pressures.
The opposition Free National Movement has characterized the VAT exemption as a strategically timed election tactic. Halkitis refuted these claims, maintaining that Prime Minister Philip Davis has consistently advocated for complete VAT removal on food items and that strengthened public finances now enable this fiscal change. ‘We feel very confident that we can, because of the growth that we experienced in the economy, absorb any revenue loss associated with this reduction,’ Halkitis asserted, referencing October’s International Monetary Fund assessment which noted economic improvement.
The policy shift is projected to reduce government revenues by approximately $15 million annually. This follows previous VAT adjustments: the tax stood at 12% under the former Free National Movement administration, was reduced to 10% in 2022 by the Davis government (while controversially expanding to previously exempt breadbasket items), and was then cut to 5% on groceries in January 2025 before the current elimination.
While consumers have welcomed the relief, major supermarket chains have expressed practical concerns about implementation timelines. Debra Symonette, president of Super Value, indicated her 13-store chain might require an extension beyond the April 1 deadline to adjust pricing across thousands of items representing 80% of sales. Minister Halkitis dismissed these concerns, expressing confidence that retailers’ modern automated systems would facilitate compliance within the standard three-month adjustment period. He additionally urged retailers to refrain from price gouging, emphasizing ongoing global affordability challenges.