The Bahamas: Tax Reforms for Increased Buoyancy
IMF Staff Country Reports, January 28, 2014
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- The Bahamas: Tax Reforms for Increased Buoyancy
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Bibliographic details
- Published: January 28, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484377710.002
Key findings
- The Bahamas has a low tax effort owing to limited tax handles and underutilization of available ones.
- Real property tax collections as percent of GDP have doubled within a decade.
- A graduated stamp duty on the conveyance of immovable property is imposed at fairly steep rates.
- As a requirement to World Trade Organization membership, the tariff rates will be lowered from their current levels.
- It is expected that revenue losses from tariff reduction will be compensated by value-added tax revenues.
Tax instruments and revenue trends
- Real property taxes: collections have increased markedly, with collections as percent of GDP having doubled within a decade.
- Stamp duty on conveyance of immovable property: applied on a graduated basis and described as imposing fairly steep rates.
- Tariffs: scheduled to be lowered to meet WTO membership requirements; current levels will be reduced.
- Value-added tax (VAT): anticipated to offset revenue losses from lower tariff rates.
Policy implications and recommendations
- Broaden and better utilize existing tax handles to raise tax effort.
- Continue strengthening real property taxation as a buoyant revenue source, given recent increases in collections relative to GDP.
- Review the structure and rates of the graduated stamp duty to balance revenue needs with property market effects.
- Implement VAT measures and ensure effective administration to compensate for tariff revenue reductions associated with WTO commitments.
- Enhance revenue administration capacity to capture underutilized tax bases and to implement VAT effectively.
International Monetary Fund. "The Bahamas: Tax Reforms for Increased Buoyancy", IMF Staff Country Reports 2014, 017 (2014).
Content in this bundle
- The Bahamas: Tax Reforms for Increased Buoyancy; IMF Country Report 14/17; June 2013