Government to extend a number of Special Economic Recovery Zone Tax Concessions
By Llonella Gilbert
Dec 9, 2020 - 6:36:54 PM
Nassau, The Bahamas – Senator J. Kwasi Thompson, Minister of State for Finance, said the Government has made a decision to extend a number of tax concessions under the Disaster Reconstruction Authority (Special Economic Recovery Zone) (Relief) Order, 2020 to June 2021.
During his Statement on the Extension of the Disaster Reconstruction Authority (Special Economic Recovery Zone) (Relief) (No.2) Order, 2020 in the Senate on Wednesday, December 9, 2020, Sen. Thompson said Grand Bahama and the Abacos were designated as Special Economic Recovery Zones (or SERZ) immediately following the catastrophic impact of Hurricane Dorian.
“The tax relief measures administered by the Ministry of Finance and its agencies under the SERZ have provided vital support to the local communities ever since the islands where devastated. Many of the provisions were set to expire on December 31, 2020.
“However, to further assist persons and businesses who are still recovering, and are now grappling further with COVID-19, the government has agreed to extend a number of tax relief measures to June 2021.”
He explained that despite the fact that government revenues are down by as much as 50 per cent, this Administration is ensuring that it still does as much as possible to cushion the economic blow for communities experiencing hardship.
“The reality of our fiscal situation means that we cannot do or have everything on our wish list. However, the government will continue to deliver tax relief in critical areas.”
Senator Thompson said the government recognizes the need for concessionary fuel pricing while the work to rebuild the power grid continues. For that reason, the local sale of fuel will continue be tax free, given the ongoing need to run portable generators as electricity restoration continues in some communities.
He noted that the government also recognizes that rebuilding takes time, and the reconstruction of damaged homes continues. For that reason, the local sale and importation of household furniture, furnishings and appliances will continue to be tax free.
Furthermore, Senator Thompson stated that government recognizes that many ordinary Bahamians are still looking to buy and sell properties for regular residential development. For that reason, it is extending the opportunity to receive a discount on the VAT payable on the sale of real property for transactions valued up to $500,000.
He said the government recognizes as well that vehicles that have been ordered may not arrive in the country by the end of December. Accordingly, the government will honour the current tax concession on replacement vehicles, provided that there is documentary evidence that it has been shipped by December 31, 2020, and provided that it arrives by April 30, 2021.
“The Government would like to thank the Abaco Chamber of Commerce and other community stakeholders in Grand Bahama and Abaco – with whom the Ministry of Finance has had the opportunity to consult. Their views and suggestions have informed the decisions of the government to extend those items critical to the recovery and restoration.
“Certainly, we appreciate the views expressed by some that all current measures should be continued. That sentiment however had to be weighed against the reality of a very challenged fiscal situation brought about by the current economic reality.”
He stated that nonetheless, the Government is demonstrating that it is fully committed to supporting the ongoing Hurricane Dorian recovery process that continues within the SERZ. “The work is not over, and we plan on leaving no one behind.”
Senator Thompson explained that for clarity, the relief provisions from business licence and real property taxes and from VAT and import taxes on consumables, clothing, equipment, and other replacement items other than those referred to above will be discontinued at December 31 as per the current order and the originally agreed schedule.
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