The Value Added Tax will be reduced from 16% to 14% and marks a move by the coalition government to begin honouring one of its campaign promises.
Finance Minister Winston Jordan made the announcement on Monday during his budget presentation. The Minister also announced that several other items will be added to the VAT exemption list.
However, Jordan also announced that electricity and water supply will now attract the 14% VAT. But only persons whose monthly electricity bills surpass $10,000 will have to pay the VAT and only persons whose water use bill surpasses $1500 per month will have to pay the Value Added Tax on those bills.
There have been calls for a reduction in the Value Added Tax since under the previous government which implemented the tax. Since leaving office, the PPP has also been calling for a reduction in the Value Added Tax.