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The Bahamas saw its budget deficit fall by more than 60 percent in the first three months of the fiscal year, which began on July 1, following the introduction of VAT.
The new VAT regime was introduced, with a 7.5 percent headline rate, on January 1, 2015. The measure is one of a number taken in recent years to support the Bahamas's objective of becoming a member of the World Trade Organization.
New statistics from the Central Bank show that the deficit for the three-month period fell by BSD91.6m (USD91.6m) to BSD60.3m, after tax revenues increased by BSD120.6m. The Bahamas received BSD165m in VAT receipts.
Tax receipts were up 40 percent during the three-month period, despite an 11 percent fall in revenues from international trade taxes.
With the elimination of the hotel occupancy tax in January 2015, following the introduction of the VAT, selective taxes on services were almost negligible, at BSD0.1m, compared with BSD12m a year earlier.
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