The Bahamas cuts VAT on medicines and medical supplies from 10% to 5% from 1 September 2025

What changed in detail

The Value Added Tax (Amendment) (No.2) Act, 2025 (No. 45 of 2025) received assent on 27 June 2025 and was published in the Extraordinary Official Gazette on 1 July 2025. Most of it came into operation on 1 July 2025, but under section 1(3) section 22(f) came into operation on 1 September 2025.

Section 22(f) inserts a new Part II into the Fourth Schedule to the VAT Act, the reduced-rated goods schedule. It lists about 62 tariff lines of medicines and medical supplies, including:

• vaccines and other immunological products, gland extracts and stem cells;
• medicaments (headings 3003 and 3004), dressings, sutures and first-aid kits;
• contraceptives, colostomy bags, syringes, needles and lancets;
• blood-pressure and blood-glucose meters;
• baby wipes, bed pads, infant napkins, sanitary towels, tampons and adult undergarments.

Part II has no rate column. The 5% rate comes from section 6(1)(b) of the VAT Act, which taxed Fourth Schedule goods at 5% if sold unprepared in a food store. Section 2(a) of the same Act widened the definition of “food store” to include a business licensed to operate as a pharmacy, so pharmacies could apply the 5% rate. VAT on these goods fell from 10% to 5%.

What it means

The 5% rate on these goods still applies, and its reach has since widened. The Value Added Tax (Amendment) Act, 2026 (No. 4 of 2026, in force 1 April 2026; official text) renumbered this Part II as the new Part I of the Fourth Schedule, headed it as chargeable at the reduced rate of 5%, and deleted the words “if sold unprepared in a food store” from section 6(1)(b).

Since April 2026 the 5% rate therefore attaches to the goods themselves, whoever sells or imports them, rather than only to sales by food stores and pharmacies. A seller that charged 10% on these lines because it was not a food store or pharmacy should have moved to 5% from 1 April 2026.