Categorized | National News

VAT Exemption On Electricity Increases

The recent spike in fuel surcharge has left the government to revisit its value added tax (VAT) exemption on electricity bills.

Initially aimed at assisting Bahamas Power and Light (BPL) consumers whose monthly bills were capped at $100 per month, this figure was soon bumped to $200 to include some 60-plus thousands of BPL’s 90,000 customers.

This was said to  feasible up to the time two generators were damaged in a fire at BPL’s Clifton Pier station; taking away about 70 megawatts of energy.

Consequently, the Blue Hills power station had to be used.

However, Prime Minister Dr. Hubert Minnis, in The House of Assembly yesterday morning, pointed out the problem. 

“The Clifton utilizes bunker C which is by far cheaper than what is utilized at Blue Hill, diesel, which is over $5 per gallon,” he said. 

“So as a result of the fire and the subsequent switch to ensure that electricity is provided for the nation, the cost would have subsequently increased.”

However, this has pushed a number of BPL’s residential consumers over the $200 threshold.

Consequently, the government has come up with a plan.

“Today I advise the  house that the government will be moving an amendment to the law to allow for a temporary increase in the VAT exempt ceiling from $200 a month up to $300 per month through the end of the fiscal year – that being June 2019.

“This will be made effective for December 2018 and will show up in the January billing cycles.”

The Prime Minister said he’s also requested Public Works Minister, Desmond Bannister, and the BPL team to review and report the full range of options open to the government to address the increase in electricity bills. 

“I wish to assure the Bahamian public that we remain resolute in the need for the country to substantially reduce its energy cost and the undue burden it places on Bahamian citizens and on the cost of doing business in The Bahamas.

“We will continue to explore the reduction of energy costs, we will make the substantial transition to solar and other renewable energy supplies, you will hear much more about these plans and strategies in the coming months,” said the Prime Minister. 

Minister Bannister is expected to make a complete report of what happened during the Clifton Pier fire and how the government plans to resolve the issue both short and long term.

Written by Jones Bahamas

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