Duty-Free but Not Tax-Free: Excise Duty Explained
By George · updated 2026-09-30 · worked examples checked against the Bahamas Tariff Act (schedule version 2026-2027)
Read the tariff schedule on its own and a car imported into The Bahamas looks duty-free. Every line under heading 8703 (motor cars) has a 0% customs duty rate. That's accurate, and it's also one of the costliest misunderstandings an importer can make.
Those goods aren't taxed under the Tariff Act. They're taxed under the Excise Act, a separate law with its own schedule, and the excise is collected at the border in the same way as duty.
What carries excise
Around 500 tariff lines have an excise rate, and roughly 440 of them are free of customs duty. They're mostly goods the government taxes heavily for revenue or policy reasons: vehicles, fuel, alcohol, tobacco and firearms.
Vehicles
Motor cars pay 0% customs duty and between 10% and 65% excise, depending on the vehicle:
- Electric golf cars: 10%
- New motor vehicles with a small engine: 25%
- New motor vehicles with a mid-range engine: 45%
- Used motor vehicles: 65%, whatever their age, including vehicles over ten years old and antique and vintage vehicles
The used-vehicle rate is the one that surprises people. A used car imported at $12,000 is free of customs duty but still owes roughly $7,800 in excise before VAT and fees are added.
Two kinds of excise
Ad valorem excise is a percentage of value, like duty. 478 of the 500 lines work this way, and a calculator can work them out exactly.
Specific excise is charged per unit of quantity, and 22 lines work this way: unleaded gasoline and diesel at $1.15 BSD per US gallon, and vodka at $13.00 BSD per imperial gallon, for example. A price-based calculator can't produce these, because the charge depends on how many gallons you import, not on what you paid.
For those lines duty242 tells you that excise applies but doesn't put a number on it, because showing zero would be wrong.
The base is different too
Excise is charged on the customs value plus the fees and charges payable on entry, so the processing fee and any environmental levy are in the excise base and customs duty isn't. Since excise goods are almost always free of customs duty, this rarely changes the result, but excise isn't simply duty under another name.
How to avoid a surprise
For anything in these categories, don't take "0% duty" as the full answer. The pages for chapter 87 (vehicles), chapter 27 (fuels), chapter 22 (beverages and spirits) and chapter 93 (arms) flag every excise line and show the rate where one is published.
Car parts are in the same position. Heading 8708 is free of customs duty, and its line for other parts and accessories carries 60% excise.
For everything else, meaning the electronics, clothing and household goods most people import, excise doesn't apply and the four ordinary charges are the whole bill.