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Bermuda Publishes Pre-Budget Report

by Amanda Banks,, London

19 December 2011

The Bermuda government is considering a number of tax measures for the 2012 Budget, to continue to consolidate the territory's fiscal finances, and reinvigorate economic growth and encourage job creation, according to pre-budget report from the island's Finance Minister, Paula Cox.

Having achieved a reduction in the territory's debt during 2011, despite the territory's sluggish economy, Cox said the government is in a position to support businesses in the forthcoming budget.

The report shows that revenues increased by BMD74m (8.1%) year-on-year as a result of better than expected tax receipts from payroll taxes, the foreign currency purchase tax, stamp duty on estates, vehicle licensing fees, and the biannual review of government fees. Expenditure, however, also breached budget projections, increasing BMD64m (5.7%) year-on-year.

The document states that Bermuda is expected to have experienced an economic contraction during 2011, with lacklustre economic performance expected to persist until late 2012, when a return to economic growth is forecast. News of the territory's performance in 2011 as an international financial centre is more positive in the report however. Over the first nine months of 2011, 624 new international companies and partnerships were registered in Bermuda representing a 15.3% increase over the 541 companies that were registered in the corresponding period of 2010.

Looking ahead to the imminent budget, Cox has proposed a number of tax measures for introduction during 2012. Among the measures proposed, the government is to consider reducing the betting tax to encourage more betting transactions to be based in Bermuda. The government is also to consider consolidating the duties applicable on the import of personal goods. Other proposals include: increases to so-called 'sin taxes', on alcohol and tobacco; reform of the territory's vehicle licensing regime; the introduction of a tax on vacant land; and a review of existing tax reliefs, including payroll tax concessions for specific industries.

TAGS: tax | business | international financial centres (IFC) | budget | Bermuda | fees | payroll | offshore | gambling | licensing | stamp duty | currency

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