Bermuda Government Conducts Tax Review Using Census Data, Report Alleges

by Mike Godfrey, Tax-News.com, Washington

03 September 2002

The Bermuda Royal Gazette reported on Friday that a controversial story carried by its sister publication - the Mid-Ocean News - which suggested that the PLP government has been examining the possibility of imposing a tax on income was true...only the facts were changed to make it more interesting.

The Mid-Ocean News reported in July that the government had been in consultation with the Canada Customs and Revenue Agency (CCRA) about the best way to impose an income tax in Bermuda, an assertion strongly denied by the Finance Ministry.

However, speaking to the Royal Gazette on condition of anonymity, a government insider revealed that an 'under the radar' tax review has been taking place, based on data gathered from the 2000 Bermuda Census.

'Everyone noticed that questions on the sources of household income had been slipped into the Census but no one - at least publicly - ever questioned why. A tax review is the reason why.'

However, he stressed that the nature of the review is purely 'informal', and has come about as a result of doubts regarding the reliability of a previous tax review commissioned by the United Bermuda Party (UBP), who are vehemently opposed to changing the jurisdiction's tax code.

'When word leaked, it's hardly surprising people reached the wrong conclusions given the fact that Bermudians have been conditioned for years to view the Progressive Labour Party as tax-raising radicals,' he explained, adding, however, that the Mid-Ocean News report was 'mischievous and inflammatory' for giving the impression that Bermuda's tax code was being rewritten in secret by the Finance Ministry.

'There is not a Machiavellian masterplan in the works to draw up blueprints for a tax on unearned income...The bottom line is that the government has not only the right but the obligation to explore all avenues when it comes to taxation. And let me stress that the operative word here is explore.'

'When all's said and done, this tax review might well reach exactly the same conclusions as the UBP report - that a tax on unearned income is an inappropriate way for Bermuda to go. But the government has a right to reach its own conclusions. It's unrealistic and unfair to expect it to be bound by the findings of a UBP hand-me-down.'

Recommended