Bermudan Budget Concentrates On Social Funding

by Amanda Banks, Tax-News.com, London

24 February 2004

The Bermudan government budget, delivered last Saturday by Finance Minister Paula Cox, contained only one notable tax increase for business, with most of the additional revenue to be raised from fee and licence hikes.

"The thrust is now on the social agenda and on taking active concrete steps to make Bermuda the premier jurisdiction not just for incoming businesses and from the financial services aspect and regulatory focus, but also to make it a place that will be seen as unparalleled in attending to the needs of its people," declared Ms Cox.

"I had hoped to avoid raising taxes in 2004/05. However that is not a realistic option,” explained Cox, announcing an increase in the standard rate of payroll tax from 12.75% to 13.5% - the only major taxation change as far as the business sector was concerned. The new rate will apply to firms with payrolls amounting to more than $200,000 per year. In addition, the payroll tax salary cap is to be raised from $225,000 to $235,000.

The government envisages an extra $12 million in revenue will become available from the payroll tax changes. The minister also revealed that minor adjustments to land taxes will occur in the near future.

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