By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

THE value added tax exemption ceiling on electricity bills has been raised to $200, Finance Minister K Peter Turnquest revealed yesterday.

The change will come into effect August 1.

Last week he announced the ceiling would be $100, but the decision was met with calls to increase the limit as some consumers argued not many households fell within the range to receive the exemption.

A week later, yesterday, Mr Turnquest told parliamentarians the decision was made to bring relief to as many people as possible.

The government, he said, will also extend the duty-free provision for clothes, shoes and other clothing related items for retailers in response to feedback from citizens.

"We are extending the duty-free provision for clothes and shoes by application, to include apparel, fabric, thread, zippers, and buttons such as to accommodate those who make clothes for themselves or for others," Mr Turnquest said yesterday.

"These duty-free provisions are to be facilitated by application as well and again that's because we want to ensure that the benefits go to those who we are trying to assist.

"We are also extending the electricity bill VAT exemption ceiling from $100 per month to $200 per month. That means that some 63,000 of the 90,000 BPL residential customers will now benefit.

"Again this will apply to all licenced utilities in the Bahamas and it will take effect come August 1.

"Further, just to address a few of the questions we have received, VAT relief on medicines includes over the counter medication."

He continued: "We know that there are further questions regarding this change and we encourage persons to chat with us on our Ministry of Finance Facebook page. Transition guidelines for industries affected will be issued shortly to address issues of contracts and other complex transition matters."

Mr Turnquest also hit back at Progressive Liberal Party Leader Philip "Brave" Davis.

On Tuesday, the opposition leader was non-committal on whether a PLP administration will return the value added tax rate to 7.5 percent should the party be elected to office in the next general election.

Instead, Mr Davis said he was not going to make any promises because he could not say what condition the current Free National Movement government would leave the country in following an election.

"In starting this debate, I would be remiss if I failed to note and comment on the observations offered by the leader of the opposition, mostly recently, just last night when he was unable to commit to reverse the tax increase," Mr Turnquest said.

"The PLP wrecked the fiscal house of the Bahamas. They know this, and the numbers are very, very clear. But Mr Davis knows he cannot and will not be able to reduce the VAT because he knows the financial situation that he and his party created. He knows that we are doing the right and proper thing by addressing it by setting up the country for future prosperity.

"If he thought this was the wrong move, he would be brave enough to commit to reducing it back to 7.5 percent as it is today. But he understands the financial gap. And he knows this is something that had to be done.

"All his bluster and posturing is just another example of PLP duplicity."

In response to criticisms he and the Free National Movement have flip-flopped the VAT issue Mr Turnquest also said: "There is nothing shameful about changing your position based upon the facts as they change. There is nothing shameful about that. Who among us has not had a change of position once we find out some circumstances?

"I mean every time you wake up in the morning you put on a suit because I could tell you that I did it this morning. (I) put on my suit and then decided what tie I was going to wear and I had on the tie, then I decided I would change it because of the colour of my suit. It depends on the circumstance."