While giving an overview of Budget Estimates for Revenue and Expenditure, Minister of Finance the Hon. Michael Halkitis stated that the 2026/2027 budget estimate for total revenue amounted to $4.4 billion or 23.6 percent of GDP.

“Total expenditure is estimated to amount to $4.1 billion or 22.4 percent of GDP,” he said, during his presentation of the Budget Communication for the Fiscal Year 2026-2027, in the House of Assembly, on May 27, 2026.  “Of this, recurrent expenditure accounts for $3.7 billion or 20.1 percent of GDP, and capital expenditure for $415.8 million or 2.2 percent of GDP.”

Minister Halkitis added:  “The fiscal surplus is estimated at $223.1 million or 1.2 percent of GDP, with the primary balance showing a surplus of 5.2 percent of GDP.  Given this, the debt to GDP ratio has been projected at 59.9 percent of GDP at the end of FY 2026/2027.”

He noted that, while that surplus was lower than previously projected in the Fiscal Strategy Report 2025, the revision reflected a changing global and domestic environment.

“Ongoing tensions in the Middle East have increased uncertainty, particularly around energy and import costs,” Minister Halkitis pointed out.  “At the same time, we have made the deliberate decision to strengthen our healthcare system, including increased support for the Public Hospitals Authority and further investment in hospital services.”

He added:  “These are necessary and responsible choices.  Although they have narrowed the surplus, the fiscal position remains positive, underscoring this Government’s continued commitment to sound financial management while prioritizing the needs of the Bahamian people.”

Minister Halkitis said that, beyond the numbers, the Budget was defined by the policies that support it.

“It is through our revenue measures that we ensure fairness, protect the tax base, and create the conditions for sustained growth and opportunity,” he said.

Minister Halkitis added:  “This year’s revenue measures are structured around five pillars of reform: Cost of Living Relief and Social Equity; Fair and Modern Revenue System; Compliance, Enforcement and Revenue Protection; Modernization and Ease of Doing Business; and Service Sustainability and Fair Contribution.   These pillars reflect a deliberate shift in our approach, from isolated adjustments to a coordinated strategy that improves fairness, strengthens enforcement, and modernizes the system as a whole.”

He stated that his Government began that with opportunity.

“We are, therefore, extending VAT relief for first-time homeowners by expanding zero-rated treatment to include multi-unit properties such as fourplexes, triplexes, and duplexes; particularly where at least one unit is owner-occupied,” Minister Halkitis said.  “To clarify, this VAT relief will be on the entire building rather than just the proportion where the first-time homeowner resides.”

“This reform reduces the upfront cost of homeownership, supports small-scale investment and rental income, and reflects how Bahamians are increasingly entering the housing market today,” he added.  “This measure takes immediate effect, helping more Bahamians to own property, build equity, and generate income.”

Minister Halkitis noted that his Government would also discuss in the Budget Debate measures that directly impact Bahamian households.

“Our review of the tariff regime revealed that several essential and sensitive goods were being taxed at rates that did not reflect their purpose or their importance to households,” he stated.  “We are correcting that.”

Minister Halkitis added:  “We are introducing a duty-free tariff line for chair lifts designed for the elderly and people with disabilities, reducing the duty from 45 percent to zero.  These items were previously grouped under general machinery, an approach that failed to recognize their essential nature.”

He stated that, that day, his Government aligned policy with reality, and was also addressing medical needs with dignity.

“To help patients with cancer, alopecia, and similar conditions, we are revising the treatment of human hair and wigs by reducing duties and creating clear classifications so they are no longer grouped with cosmetic items like false beards or eyelashes,” Minister Halkitis announced.

He added:  “At the same time, we are easing the cost of everyday living by reducing duties on: common household plastic items; paper goods such as tablecloths and serviettes; and sanitary products.  These measures are targeted, practical, and designed to deliver real and meaningful relief to Bahamian households.”

Minister Halkitis stated that his Government was also taking steps to improve fairness and access in everyday systems.

“We are eliminating the registration fee for non-motorized bicycles, removing an outdated burden and encouraging affordable and environmentally friendly transportation options,” he said.

“At the same time, we are modernizing the regulatory framework for items such as electric bicycles, ensuring that they are properly registered in a simple and accessible manner,” Minister Halkitis added.  “While also encouraging safe and efficient means of transportation.

“We are also advancing energy equity through the development of legislation to ensure that residents of the Family Islands are not burdened with higher electricity costs simply because of where they live.  Equity across The Bahamas remains a priority for this Administration.”

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