Excise Duties On Vehicles To Be Based On Value, Not Engine Size – Bahamas Tribune

EXCISE duties on vehicles will be based on value rather than engine size as part a wave of new measures aimed at regenerating the Bahamian economy.

The new rules will apply from July 1, when cigarette duty will change to 15c per stick and duty on manufactured spirits will rise from $6 to $8 per gallon and from $11 to $15 per gallon for imported spirits.

Duty levied on fuel for power generation will be removed, Prime Minister Perry Christie told the House of Assembly today as he moved the 2013/2014 Budget Communication.

He said he expected electricity costs to come down by more than six per cent.

Mr Christie announced a range of measures today, saying the Bahamian economy grew by 1.8 per cent in real terms last year, in line with the 1.7 per cent growth registered in 2011, but below the 2.5 per cent rate projected.

First time home owner Stamp Tax exemption will be extended from June 30 to June 30, 2018.

There will be: $2m for new police vehicles; $10m for tourism marketing; $10m for small home repairs; $30m for education; $10m for sporting facilities in the Family Islands.

A dedicated cruise ship will come out of Miami into Bimini; hospitals will be constructed in Cat Island and Eleuthera and there will be $4m for a School of Agriculture in North Andros.

Financial institutions which deal with B$ accounts, with some exceptions, face a new Business Licence Fee of three per cent on gross revenue.

Stamp tax will be applied at 5.0%, rather than 1.5%, when B$ dividends or profits are repatriated out of the Bahamas.

Government entities will be required to pay Business Licence Fees; e-commerce transfers and point of sales payment by Debit Cards will be free.

$1m will be spent on developing a ‘Mardi Gras’ style cultural festival for the Bahamas to take place each Lent, starting in 2015, which could incorporate a cultural village, public processions and song and costume competitions.

“Various groups, such as the Saxons or the Valley Boys, could become corporate entities. These entities, officially in the business of cultural tourism, could sell costumes, including sales online, both here and abroad,” said Mr Christie.

“There will be specific stipulations that a certain percentage of the contents of costumes will be made of straw and sisal. Such stipulations would stimulate and provide a much needed boost to those domestic industries.”

The Passenger Tax Act will be amended so that all departure tax collected by ticketed passengers would be assessed and remitted to the Government; Children under the age of 12 will be given a $300 exemption on return to the Bahamas.

From July 1, customs duty on vehicles under $10,000 will be 65 per cent; over $10,000 but less than $40,000, 75 per cent; over $40,000, 85 per cent.

Duty on electric motor cycles will be reduced from 75 to 65 per cent.

Cigarette duty will be 15c per stick, cigars will add 50c to the current rate while the duty on electronic cigarettes goes from zero to 45 per cent.

The $10 stamp tax levied on customs entries will be axed and a 1 per cent customs processing fee introduced.

A processing fee will be introduced for manifest and other declarations for inbound and outbound aircrafts and vessels.

One per cent of the value of entries submitted to customs will be subject to a minimum of $10 and capped at a maximum of $500.

Duty will also be axed on solar panels, inverters for panels, solar powered air conditioners, bed pads, urinary bags, incubators, isolators and defibrillators.

The PM said that between May and November of 2012 the national unemployment rate fell to 14% from 14.7%.

The current account deficit has widened by approximately one-third to $1.46 billion in 2012.

External reserves contracted by $74.6 million during the year, said the PM.

At December 2012, external reserves stood at $810.2 million. The latest estimate of reserves through May 24 placed balances at $814.3 million.

Mr Christie said the fuel charge assessed by the Bahamas Electricity Corporation rose by over 15 per cent in 2012, to a level of 26.7 cents per kilowatt hour.