"As Government plans our country’s finances for the next five years, equity and fairness will continue as the key principles underlying our tax policy in building the tax base to meet our commitments," Cox told Parliament last week, as she delivered her fifth budget as the jurisdiction's Finance Minister.

In order to pay for a proposed 5% increase in pensions and allowances for seniors, Cox announced that Social Insurance contributions will increase by 6.75%, with effect from August 2008.

The standard rate of payroll tax, assessed on businesses with annual payrolls of BMD1 million or more, and on exempted companies, will also be raised from 13.5% to 14% in 2008/09, although the salary cap will remain at BMD350,000.

The lower rates of payroll tax for small and medium sized businesses, including taxi drivers, farmers and fishermen will remain unchanged in 2008/09, as will the employee portion of the payroll tax, currently at 4.75%. Cox estimated that an additional BMD5.5 million is anticipated to flow from this adjustment.

There was also bad news for both local and international companies registered in Bermuda, as Cox announced a 6.5% increase in company fees, applicable from 1 April, 2008. According to Cox, this measure, which will raise an additional BMD2 million in revenues, will ensure that the government has "the necessary financial resources to address improvements to our regulatory framework".

"Bermuda’s name and the Bermuda brand as a jurisdiction has cachet. We jealously prize it and we are resolute that we will take all reasonable actions to protect Bermuda’s name as a premier jurisdiction in international financial services both in the courts and in terms of economic diplomacy," Cox told Parliament. However, she went on to observe that:

"The cost of maintaining the good name of Bermuda’s company registry continues to increase. We have always prided ourselves on effective gate keeping powers. We must continue to enhance that and to ensure that we have the necessary resources. There have been instances of action and in tandem with the work that the independent regulator is undertaking we in Government also have to ensure that we have the necessary financial resources to address improvements to our regulatory framework."

Cox also announced that a newly-established treaty unit within the Finance Ministry headquarters will conduct negotiations with a number of OECD countries in the year ahead, including with Germany, Japan, Mexico, the Netherlands, and the Nordic countries. In addition, the Ministry will continue discussions with the European Union regarding the Directive on the Taxation of Savings Income.

While land taxes are to be kept on hold for another year, Cox announced that sale of land to non-Bermudians will be increased from 22% to 25% for houses, and from 15% to 18% for condominiums. The fee for sale of fractional units will be set at 18% on the second disposition of such units. The fee for the first-time sale of such units will be 10%.

Other taxes set to rise include the duty on motor boats and sail boats, from 33.5% to 55%, and the airport departure tax, which is being increased by 40% to BMD35. Stamp duty on houses valued at more than BMD1 million will also increase, but properties valued below this threshold will have reduced rates of stamp duty.

Meanwhile, businesses in the Economic Empowerment Zones will pay a special rate of payroll tax for one to two years, and there will also be concessions for retailers, and customs duty relief for materials used in the construction of starter homes.