The Federal Government has issued guidelines for this year, as it relates to the VAT reduction announced in December by Prime Minister and Minister of Finance, Dr. Terrance Drew. He stated in his 2025 Budget Address that the VAT (Value Added Tax) will be reduced from 17% to 13% starting January 1, 2025, for the first six months.

This reduction will apply to all goods and services that were previously sold at the 17% rate, aiming to ease financial pressures on families and businesses while promoting economic stability.

 Transactions before January 1, 2025, will still be charged at the 17% rate. The applicable VAT rate is based on several factors, including the delivery date of goods, the issuance date of invoices, or the receipt of payments.

The 10% reduced rate for commercial rentals, accommodation services, and restaurant supplies will remain unchanged.

According to a release from the Government, “to ensure the VAT reduction benefits are realized, the Government will implement strict monitoring to prevent price increases and unfair practices, backed by the Consumer Protection Act.”