Eugene Cox Unveils 'Sweetheart' Budget

by Mike Godfrey, Tax-News.com, New York

19 February 2002

The Bermudian Finance Minister, Eugene Cox, unveiled what some have described as a 'sweetheart budget' on Friday, sparing the country's citizens and corporations any major tax increases in the forthcoming financial year.

Analysts expressed surprise that even so-called 'sin taxes' were spared, but the Finance Minister stressed that the empahasis for his 2002 budget was firmly on inclusiveness. 'We shall exclude no one. We shall leave no one behind,' he explained in the opening remarks of his budget statement.

Mr Cox revealed that goals of his latest finance bill are to strengthen the industry sectors in the jurisdiction which have been hardest hit by the global economic slowdown, and to promote social cohesion. To this end he announced the creation of an unemployment insurance fund, payroll tax relief for struggling businesses, and a dramatic reduction - from 30% to 6% - in land tax for properties valued at over $90,000 annual rental value.

Friday's budget also revealed that over the coming fiscal year, the Bermudian Government will be spending an additional $22.8 million in areas such as education, training and development, health, housing, transport, and law enforcement. However, it also provided for around $75 million in additional borrowing in order to keep priority capital projects on stream.

The Finance Minister revealed that although the jurisdiction's tourist sector is suffering as a result of the September 11 terrorist attacks, with declining vistor numbers expected to lead to a drop of 1.5% in GDP, the construction sector is expected to be active throughout 2002, and the Governmet is optimistic of continued growth in the international business sector.

Mr Cox refused to be rattled when grilled over whether his latest finance bill represented an 'election budget', suggesting that the term was in fact a compliment.

'We crafted the budget to meet the circumstances so that Bermudians and all people who live here will benefit,' he explained Friday. 'In doing that if it so happens to be a sweetheart budget, as you want to call it, then that's great.'

Recommended