Bermudian Tax Report Has Created Uncertainty Says Opposition

by Amanda Banks, Tax-News.com, London

15 April 2004

Bermuda’s opposition leader Grant Gibbons has accused the ruling Progressive Labour Party of sanctioning “tax and spend” policies following the publication of a long awaited report on taxation.

Finance Minister Paula Cox ordered the release of ‘The Report on Bermuda Taxation’ on Monday, some seven years after it was first commissioned by the then United Bermuda Party government, of which Mr Gibbons was finance minister. The report was subsequently shelved prior to the general election, but then revived after the PLP came to power and directed the report's authors to find a way of increasing the national tax burden from 18% of GDP to 24% of GDP, although this was eventually reduced to 20% to 21%.

Nevertheless, Dr Gibbons contends that this additional 2% to 3% in the tax burden translates into a “huge increase” in tax rates. “That would translate into roughly doubling or tripling land tax at the current rate or a 50 percent increase in payroll tax,” he claimed.

Whilst Ms Cox has pledged that income taxes will not rise as a result of the report’s recommendations, the Opposition leader has pointed out that it is uncertain how the government will act in response to the report, and asked the minister to clarify her position on the report.

“It has been almost a decade since the document was commissioned and the economy has changed quite a bit since 1997/98,” observed Dr Gibbons.

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