Bermuda Government Owed Over $25 Million In Taxes

by Mike Godfrey, Tax-News.com, Washington

11 June 2002

Presenting the results of an audit for the financial year which ended on March 31, Bermuda's Government Auditor, Larry Dennis professed himself generally happy with improvements in government finances and accounting practices, according to a report in the Royal Gazette at the weekend.

However, he expressed disappointment that the government is still owed more than $25 million in tax and pension contributions, 'naming and shaming' the delinquent businesses in question, and urging the Bermudian authorities to get tougher in their collection of the taxes.

Mr Dennis told the House of Assembly on Friday that despite improvements in the government's collection and accounting procedures, there are still areas of concern - namely its failure to efficiently collect payroll tax, land taxes, and pension contributions.

'For the Contributory Pension Fund and the Government to be owed almost $25 million of pension contributions and taxes that are more than three months in arrears is, in my view, intolerable,' the Royal Gazette quoted the auditor as observing.

He went on to explain that: 'When pension contributions and payroll tax arrears accumulate to significant amounts and the employers' businesses fail, the amounts are lost forever to the Pension Fund and the government. Some businesses may even be tempted to declare bankruptcy and then start a new business to rid themselves of pension and payroll tax liabilities.'

Mr Dennis also slammed two of the jurisdiction's betting houses for failing to remit around $400,000 in betting tax remittances each. 'To make matters worse, betting taxes are not a business tax. They are collected directly from the bettor by the betting houses,' he explained.

Responding to the Government Auditor's claims that deficient accounting systems, ineffective collection methods, and the lack of political will for change had all contributed to the current situation, Bermudian Finance Minister, Eugene Cox admitted that the report highlighted the need for continued improvement in some areas. However, he welcomed Mr Dennis' acknowledgement that there had been improvements in the level of accounting and expenditure control.

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