Income Tax May Be On Bermuda Election Agenda

by Robert Lee, Tax-News.com, London

28 November 2001

During a debate on the Payroll Tax Rates (Special Provisions) Act 2001, which gives retailers, restaurants and small business temporary cuts on payroll tax levels, backbencher Delaey Robinson from the Progressive Labour Party (PLP) raised the possibility of introducing income tax in Bermuda as part of the government's agenda in the next election.

'The sad truth about taking the reins of Government, one can only deal with the cards dealt,' said Mr Robinson.

Currently, there is no income tax, capital gains tax, VAT, sales or use tax or wealth tax in Bermuda. Instead there are annual government fees that are imposed on businesses and there is the payroll tax. Mr Robinson complained that the PLP has had to operate the tax structure implemented by the former UBP government.

For several years, said Mr Robinson, the PLP has included the possibility of income tax on its agenda because the Party considers it to be an equitable tax. However, he charged that 'bogey man tactics' turned general public opinion off the idea and the PLP decided not to raise the issue in its first term.

He added: 'There should be no fear that there will be income tax in this term but it makes it very difficult for the Minister to give back. We have a low tax burden – in the 20 percent range – compared to other countries. And to say that should be reduced is frivolous and irresponsible. But, to redistribute the tax burden, that may be a better thing to do.'

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