Hikes in two different taxes paid by visitors to the Bahamas and Barbados took effect July 1.

In the Bahamas, the Value-Added Tax (VAT) increased from 7.5% to 12%, according to the Nassau Guardian. VAT is payable on most goods and services, including food, beverages and accommodations.

The increase was deemed necessary to close the gap in the 2018-2019 budget year and beyond, according to Peter Turnquest, deputy prime minister and minister of finance.

"The increase is part of our three-year plan to reduce the fiscal deficit," Turnquest said in a televised statement.
Hotels, resorts, tour operators, attractions and other tourism businesses holding existing bookings made on or after July 1 until Sept. 30 for rooms, services, facilities and package arrangements for use by June 30, 2019 will be liable only for the 7.5% VAT.

The 7.5% rate also remains valid for bookings made by July 31, 2018, for travel on any date through June 30, 2019.

In Barbados, a mandatory Room Rate Levy per night on all guest room accommodations has different tiers, according to the room category selected.

The Ministry of Tourism and International Transport said the levy is capped at $10 per night in villas and luxury resorts; $5 per night for hotels below the luxury category; and $2.50 per night for guesthouse accommodations.

Also now in effect is a 2.5% hike on prices charged for tourism services, including island tours, meals and drinks as well as goods and services provided by spas and marinas.

The increased taxes are part of the fiscal measures in the current budget to help stabilize the country's economy, according to the Ministry of Tourism and International Transport.

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