The Bahamas officially the Commonwealth of The Bahamas, is an English-speaking country consisting of 29 islands, 661 cays, and 2,387 islets (rocks). It is located in the Atlantic Ocean north of Cuba, Hispaniola (Dominican Republic and Haiti) and the Caribbean Sea, northwest of the Turks and Caicos Islands, and southeast of the United States of America (nearest to the state of Florida). Its total land area is almost 14 000 km², with an estimated population of 330,000. Its capital is Nassau.
Originally inhabited by Arawakan Taino people, The Bahamas were the site of Columbus’ first landfall in the New World in 1492. Although the Spanish never colonised The Bahamas, they shipped the native Lucayans (as the Bahamian Taino settlers referred to themselves) to slavery in Hispaniola. The islands were mostly deserted from 1513 to 1650, when British colonists from Bermuda settled on the island of Eleuthera.
The Bahamas became a crown colony in 1718 when the British clamped down on piracy. Following the American War of Independence, thousands of pro-British loyalists and enslaved Africans moved to The Bahamas and set up a plantation economy. The slave trade was abolished in the British Empire in 1807 and many Africans liberated from slave ships by the Royal Navy were settled in The Bahamas during the 19th century. Slavery itself was abolished in 1834 and the descendants of enslaved and liberated African form the bulk of The Bahamas’s population today.
Economic activity is mostly based on tourism and financial services. A relatively high degree of economic freedom has made The Bahamas one of the most prosperous countries in the Caribbean region. The financial sectors domestic and offshore activities contribute around 15 percent of GDP. The economy has a very competitive tax regime. The government derives its revenue from import tariffs, license fees, property and stamp taxes, but there is no income tax, corporate tax, capital gains tax, value-added tax (VAT), or wealth tax. Payroll taxes fund social insurance benefits. In the most recent year, overall tax revenue as a percentage of GDP was 21.8 per cent.
The Bahamas has the 47th freest economy in the world according to the Heritage Foundation 2010 Index of Economic Freedom. The Bahamas is ranked 7th out of 29 countries in the South and Central America/Caribbean region, and its overall score is higher than the regional and world averages. Total government spending, including consumption and transfer payments, is relatively low. In the most recent year, government spending equaled 23.4 percent of GDP. Authorities are committed to improving the transparency of budget planning. Annual FDI into The Bahamas is $700 million a year. The Bahamian legal system is based on British common law.
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