NASSAU, The Bahamas – During his 2024-2025 Mid-Year Budget Statement in the House of Assembly, on February 26, 2025 Prime Minister and Minister of Finance the Hon. Philip Davis pointed out that, for the first six months, preliminary total revenue collections were estimated at $1.4 billion, reflecting a $138.9 million increase compared to the same period the prior year.
“So far, revenue collections have accounted for 40.7 percent of the annual budget target,” Prime Minister Davis said. “When compared to FY 2018/19, the last normal year before the twin disasters, total revenue for the first half of the year has grown by 42.4 percent or $429.3 million. This was achieved without any appreciable increase in taxes since this administration came into office.”
He added: “The revenue intake for the first half of this fiscal year stands as the highest revenue level this country has ever experienced for this period. This achievement can be attributed to several key factors, including more rigorous collection measures and a significant improvement in compliance, particularly in respect of real property taxes. As well, we have seen an increase in revenue yields from new policy measures, notably in respect of business licence fees and departure taxes.”
Prime Minister Davis stated that the combination of those efforts had led to enhanced revenue collections, reflecting the administration’s push towards fiscal consolidation.
“The fiscal landscape of the nation is showing promising signs of sustainability, paving the way for further investments in public services and infrastructure as well as meeting our revenue and overall fiscal objectives,” he said. “Indeed, enhanced revenues have had a major hand in narrowing the fiscal deficit from 13.1 percent of GDP in fiscal year 2020/2021 to 1.3 percent in fiscal year 2023/24.”
While sharing some of some of the key movements in revenue, Prime Minister Davis noted that tax revenue collections expanded by $122.1 million, and stood at $1.3 billion for the first six months of the fiscal year.
“This represents 41.1 percent of the budget target,” he said. “This level of tax revenue is the highest level of collection for this review period ever experienced, as I said before.”
Value-added tax collections accounted for 51.3 percent of tax revenues, and totaled $663.1 million at the half-year mark, Prime Minister Davis added. That represented growth of $17.1 million relative to the same period in the previous year and equated to 43.7 percent of the annual budget target, he said.
He pointed out that, since the presentation of the ‘December 2024 Monthly Fiscal Report’, there had been a post-period adjustment related to VAT refunds paid in December 2024 but not posted in December 2024.
Prime Minister Davis noted that, although his administration reduced the VAT rate from 12 percent to 10 percent in January 2022, the strength of the growing economy and notable enhancements in the Government’s collection efforts had resulted in increased VAT revenues.
He added that, in comparison to the fiscal year 2018/2019, when the VAT rate was 12.0 percent, the half-year VAT collections for this current year has risen by 72.1 percent, amounting to an increase of $277.8 million.
“This positive outcome happened despite recommendations from the IMF to raise the VAT rate to 15 percent in line with regional counterparts,” Prime Minister Davis said. “Our unwavering commitment to improving VAT administration has contributed to these encouraging results. I am pleased to confirm that this administration will reduce the VAT rate on unprepared food, which I will discuss in greater detail later in this Communication.”
He noted that Departure tax collections doubled, totaling $169.6 million and represented a rise of $84.8 million compared to the previous year.
“At the half-year mark, departure tax collections accounted for 70.3 percent of the budget target,” Prime Minister Davis said. “We expect that the departure tax will exceed its budget target based on the tourism results mentioned earlier in this communication.”
“Property taxes amounted to $68.6 million after expanding by $21.4 million relative to the previous year,” he added. “This equates to 29.8 percent of the budget target. It should be noted that the majority of property taxes are collected or due in the second half of the fiscal year, so we expect this number to increase.”
License (Special Licenses) to conduct special business activity witnessed a $12.1 million expansion and totaled $37.2 million as a result of gains in the business license component, which grew by $9.0 million compared to the previous year, Prime Minister Davis stated.
“In the non-tax revenue component, collections for fees and service charges, mainly for immigration and customs, increased by $10.4 million to $123.3 million, and equated to 51.4 percent of the budget target,” he pointed out.
“Another notable increase during the period occurred from Government property income, which rose $13.2 million and amounted to $14.4 million, meeting 78.6 percent of our budget target,” Prime Minister Davis added.
