The Bahamas Ministry of Finance has repealed a ten per cent hotel tax and replaced it with a 7.5 per cent value added tax.

Enacted in conjunction with the Ministry of Tourism, the VAT will be charged on hotels and home rentals as well as services purchased by guests.

According to tourism minister Obie Wilchcombe the 2.5 per cent tax savings indicates a determination among government officials to make the Bahamas a value for money destination.