The Bahamas introduces a 5% reduced VAT rate on unprepared food sold by food stores from 1 April 2025

What changed in detail

The Value Added Tax (Amendment) Act, 2025 (No. 3 of 2025) received assent on 31 March 2025 and was published in the Extraordinary Official Gazette the same day. It came into operation on 1 April 2025.

Section 3 replaces section 6(1) of the Value Added Tax Act with a three-tier structure:

• (a) a zero rate for supplies and importations in the First Schedule;
• (b) a reduced rate of five percent for supplies and importations listed in a new Fourth Schedule, if sold unprepared in a food store, subject to conditions in regulations and VAT Rules;
• (c) the standard rate of ten per cent on any other taxable supply or importation.

Section 2 adds definitions to section 2(1). A food store is a business where at least 10% of its 2024 turnover under its business licence came from selling unprepared food for human consumption, or a business licensed to operate as a pharmacy. The section also defines a reduced-rated supply, a reduced-rated importation and “unprepared”.

Section 8 inserts the Fourth Schedule, a list by tariff code of qualifying foods: meat, poultry, fish, eggs, dairy, cereals and fresh produce, among others, and also confectionery and sodas.

What it means

This change is spent. The 5% tier for unprepared food no longer exists in this form.

First, the Value Added Tax (Amendment) (No.2) Act, 2025 (No. 45 of 2025) moved chewing gum, sweets, other confectionery and sodas back to 10% from 1 July 2025 (The Bahamas raises VAT on confectionery and sodas to 10%). It also redefined a food store by the prior year’s turnover and added a separate 5% list for medical supplies (5% VAT on medical supplies).

Then the Value Added Tax (Amendment) Act, 2026 (No. 4 of 2026, assented 23 March 2026; official text) deleted the food list from the Fourth Schedule and exempted the listed unprepared foods sold or imported by a food store from 1 April 2026. Since that date the goods on that new exempt list carry no VAT when a food store sells them unprepared. The 2026 list is not a copy of the 2025 one, so check each tariff line against the 2026 Act.