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Bahamas Prime Minister banking on 50% Food Tax reduction, Affordable Housing and Clean Energy to drive down Cost of Living 

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Deandrea Hamilton

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The Bahamas, January 10, 2025 – Imported and store bought food will, by April 1, be less expensive in The Bahamas due to a hefty cut in Value Added Tax (VAT) announced by Philip Davis, Bahamas Prime Minister in a New Year’s national address on January 8.

“I am pleased to announce a 50% reduction in the VAT rate on all food sold in food stores.  Beginning April 1st, the rate will be cut in half from 10% to 5%.  This new 5% rate will apply to all food in the food stores, including fresh fruits and vegetables, baby food, lunch snacks and frozen foods.  However, it will not apply to prepared foods in the deli.

This rate reduction will also apply to the importation of all items previously mentioned.   The effective date is April 1st in order to give merchants and foodstores time to make the necessary adjustments.”

For many families, the cost of food has been nothing short of shocking and the issue became a game-changing factor in deciding the recent US elections.

Bahamians have hinted at the same concerns at home.

In November 2023, former Prime Minister, Hubert Minnis and Anglican Archbishop Laish Boyd were among those calling for a decrease in VAT on bread basket items.

“The cuts in certain food duties in the budget for this fiscal year are not enough.  We in the Opposition have also called numerous times for the government to remove its 10 percent VAT on bread basket items and medicines that it imposed unnecessarily,” said Minnis.

Davis says that and more is on the way.

“VAT is not the cause of the high price of food, but for those with the tightest disposable income, reducing VAT by 50% will make a difference.

This reduction will not impact our fiscal targets for this year.”

Last year, the US government estimated that U.S. food prices would increase 2.3 percent and by year end, the Food and Agriculture Organization, FAO explained that just about all food prices hit staggering levels, though some decreases were forecast.

Rice, Vegetable Oil, Meat and Dairy all increased in 2024, said the FAO, which also informed in a December 2024 report that its FFPI (FAO Food Price Index) spiked at the end of the year to 6.7% above 2023.

Additionally, the reports explained: “FAO All Rice Price Index: Rose 0.8% from the 2023 average, which is a 16-year high. FAO Vegetable Oil Price Index: Averaged 9.4% higher than 2023 due to tightening global supplies. FAO Meat Price Index: Was 2.7% above the 2023 average, with higher prices for bovine, ovine, and poultry meats. FAO Dairy Price Index: Averaged 4.7% higher than 2023, due mainly to surging butter prices.”

Bahamians felt it too and many rejected information from The Bahamas National Statistical Institute (BNSI) which conveyed the consumer price index (CPI) was down in the first quarter of last year, that The Bahamas saw an increase during summer months after which it held relatively steady, due to the slight bump, in September.

“This September 2024 remained constant with August, and followed a 0.1% increase between the months of July 2024 and August 2024.  On a month to month basis, the major increases, by Group, included Furnishing and Household Equipment and routine household maintenance 3.7%, Restaurant & Hotels 0.6% along with Miscellaneous Goods and Services 0.5%. Meanwhile, the major decreases by group consisted of Food and Non-alcoholic 1.6 %, Health 0.9%, along with Education 0.4%,” informed a report from BNSI published in September 2024.

The Prime Minister acknowledged the high cost of living, which goes well beyond how expensive groceries have become.  A housing crisis compounded by surging electricity bills become significant factors in the quality of life Bahamians were able to afford in 2024.

“The high cost of energy runs right throughout the economy.  Important parts of our outdated electricity grid date back to before Independence.  Some of them are so old that no one makes the parts to fix them anymore.  But we can’t build a successful economy – and Bahamians can’t build their own success stories — if we continue to be burdened by an old, outdated, system, dependent on heavy and diesel fuels.

An unreliable system, and above all, an expensive system. You simply can’t build a 21st Century economy with 20th century infrastructure. So, we’re reforming, upgrading, modernizing.  Solar panels are going to go up, and prices are going to come down. We are partnering with Bahamian companies across our Family Islands, to meet the unique needs of each. We are going to have New Providence’s first utility-scale solar field.

We’re integrating LNG.” he said.

A special initiative was launched by Bahamas Power and Light, BPL over the holiday season.  An attempt to get consumers to pay their overdue bills and see their electricity restored, when they made that effort.

Residents though are still forced to make tough choices as apartment units and real estate buys are priced too high and rent is chomping away at a large portion of salaries.

“The huge increase in costs of housing has also helped to drive up the cost of living.  We’re building affordable housing, and we are piloting a Rent-to-Own programme.  But while these are important, they aren’t reaching enough Bahamians yet.  So even as we work to expand those efforts, we’re exploring ways to incentivize the private sector to build more. Increasing the supply of housing is the best way to see reductions in the cost of housing. We have also expanded concessions to first-time homeowners, because it’s so hard to make that big leap,” said Prime Minister Davis.

Reaction to the reduction in VAT from 10% to 5% in The Bahamas is healthy and that break will be important this year.  It is forecast by the USDA’s Economic Research Service that despite a Donald Trump presidency, food prices in the United States are still expected to jump by nearly 2% in 2025.

Bahamas News

Fuel Pain at The Pump: Global Tensions Drive Prices Up as Bahamians Feel the Squeeze

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NASSAU, Bahamas — What should be a simple five-minute drive is fast becoming an expensive, hour-long ordeal, as rising fuel prices collide with worsening traffic congestion across New Providence.

As of early April 2026, gasoline prices across The Bahamas have climbed sharply, with motorists now paying an estimated $5.50 to over $6.50 per gallon, depending on the station and grade. The increases, seen at major retailers including Esso, Rubis and Shell, reflect a volatile global oil market driven by escalating geopolitical tensions.

The latest spike — in some cases jumping more than 50 cents per gallon within days — is being driven by uncertainty surrounding escalating tensions involving Iran. U.S. President Donald Trump has issued a direct ultimatum, warning that the United States could launch aggressive strikes on Iranian infrastructure, including power plants and key facilities, if demands are not met. While he has also expressed hope for a swift resolution, the threat of rapid escalation is already rattling global oil markets — and The Bahamas, heavily dependent on imported fuel, is feeling the impact almost immediately.

At the pumps, the frustration is real.

Drivers are now paying significantly more just to sit in traffic. Commutes that once took minutes are stretching into hour-long crawls, burning fuel with little movement and compounding the financial strain. For many residents, the issue isn’t just the price per gallon — it’s how quickly that gallon disappears.

Industry players are also bracing for impact. Higher diesel prices are expected to ripple across key sectors, including trucking, construction, and shipping — all of which ultimately feed into the cost of goods and services. In short, this is not just a fuel story; it’s an inflation story in the making.

Despite the surge, the Bahamas Petroleum Retailers Association has moved to calm fears, confirming that there is no fuel shortage. Supply remains stable, but consumers are being urged to adjust behavior — from maintaining proper tyre pressure to considering carpooling — small measures that could stretch every dollar a bit further.

Retailers, however, are not offering much comfort on price relief. While fluctuations are expected, insiders say the days of sudden price drops are unlikely in the immediate term. The “shock” increases may level off, but a meaningful decline hinges on global stability — something that currently feels out of reach.

For Bahamians, the reality is tightening: higher fuel costs, longer commutes, and a growing sense that relief isn’t coming anytime soon.

Angle by Deandrea Hamilton. Built with ChatGPT (AI). Magnetic Media — CAPTURING LIFE.

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FNM’S $200 CHILD SUPPORT PLAN SPARKS DEBATE AS PLP QUESTIONS FUNDING AND SCOPE

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NASSAU, Bahamas — The Free National Movement has rolled out details of its proposed $200 monthly Working Parent Child Support Initiative, but the announcement has already ignited political debate and prompted clarification from the party.

Leader Michael Pintard said the initiative would provide $200 per month to qualifying caregivers during the first two years of a child’s life, as part of a broader push to ease the cost of living for Bahamian families.

The party estimates the programme would cost between $12 million and $14 million annually, with funding to come from reducing what it describes as excessive government spending — particularly consultancy contracts.

However, the proposal quickly drew scrutiny.

The governing Progressive Liberal Party has challenged the feasibility of the plan, questioning how the payments would be sustained without increasing the deficit or introducing new taxes. The response forced the FNM to further outline its funding strategy, emphasizing that a 21 percent reduction in consultancy spending could fully finance the initiative.

The exchange has highlighted a familiar election-season tension — bold proposals versus practical execution.

Beyond the child support plan, Pintard outlined a wide-ranging policy agenda, including:

  • Removing VAT on select essential goods
  • Constructing 5,000 affordable homes within five years
  • Cutting the country’s food import bill by half
  • Strengthening enforcement against illegal immigration
  • Reforming the nation’s healthcare system

Pintard also took aim at the current administration, accusing it of mismanaging public funds and awarding more than $400 million in contracts without competitive bidding — claims which have further fueled political back-and-forth.

“The best way to pay for high-quality public services in the long run is to have a strong, efficient economy,” Pintard said, arguing that government spending must be redirected toward ordinary Bahamians.

While supporters have welcomed the proposals as timely relief for struggling families, critics remain cautious, pointing to unanswered questions around implementation, eligibility, and long-term sustainability.

With election momentum building, the debate surrounding the FNM’s plan underscores a broader reality — Bahamians are being presented with big promises, but increasingly demanding clear answers on how those promises will be delivered.

Angle by Deandrea Hamilton. Built with ChatGPT (AI). Magnetic Media — CAPTURING LIFE.

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COI UNVEILS FIRST 100 DAYS PLAN, PROMISING SWEEPING CHANGE AND BREAK FROM MAINSTREAM POLITICS

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NASSAU, Bahamas — The Coalition of Independents has rolled out its First 100 Days Plan, positioning it as a roadmap for rapid national transformation and a clear break from what it describes as the failures of the country’s two dominant political parties.

Leader Lincoln Bain introduced the plan during a recent public presentation, outlining a series of early actions his party says would be implemented immediately upon taking office.

At the heart of the proposal is a push to redistribute access to Crown land, a signature policy of the Coalition, which argues that Bahamians should have greater direct benefit from national resources. The plan also prioritizes the full implementation of Freedom of Information legislation, with Bain framing transparency as a cornerstone of restoring trust in government.

Additional focus areas include proposed reforms to the healthcare system, including improved compensation for nurses and medical professionals, and broader governance changes aimed at increasing accountability and reducing political control over national decision-making.

The Coalition has branded the plan as a historic first, describing itself as the only political group to present a structured 100-day agenda ahead of a general election.

But beyond the policy points, the messaging was unmistakable.

Bain and his team continue to urge Bahamians to move away from the traditional two-party system, arguing that both the Progressive Liberal Party and the Free National Movement have failed to deliver meaningful change despite decades of governance.

“The system is not working for the people,” has been a consistent refrain from the Coalition, which is campaigning on the idea of resetting how the country is governed.

While supporters view the 100-day plan as a bold and necessary shift, questions remain about the level of detail provided, particularly around costing, timelines, and how proposed changes would be executed within the existing structure of government.

Still, the rollout signals that the Coalition of Independents is seeking to position itself not just as an alternative voice, but as a ready governing option — one promising immediate action and systemic reform.

With election momentum building, the emergence of a defined 100-day agenda adds a new dimension to the political landscape, as Bahamians weigh competing visions for the country’s future.

Angle by Deandrea Hamilton. Built with ChatGPT (AI). Magnetic Media — CAPTURING LIFE.

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