OBA concern over tax amendment
A new tax will leave Bermuda’s least well off facing a “potentially huge bill”, an Opposition senator said this morning.
The statement comes after the Payroll Tax Amendment Act was approved in the Upper Chamber on Wednesday.
Justin Mathias, chair of the One Bermuda Alliance, said that the new tax is backdated to April 1.
Mr Mathias added: “Those that have filed their tax returns are going to have to refile them.
“It seems Government is desperate for revenue as it is not meeting its own revenue expectations.
“We have now essentially created income tax in our country and the only people that are affected are Bermudian, and not the rich ones, which is not like a labour Government which usually taxes the rich to help the poor.”
The new law introduces payroll tax relief for some new employees which is intended to encourage increased employment.
The act also addresses notional salaries — a loophole that enables self-employed persons and “deemed employees” who earn their income in whole or in part through a share of profits to declare less than they actually earn for tax purposes.
But dividends related to shares in an exempt undertaking and any dividends relating to shares from a company listed on the Bermuda Stock Exchange are not covered by the amendment.
Mr Mathias expressed concerns the changes would negatively impact those in small and medium sized businesses in the Senate.
He said in a statement issues this morning that the OBA had wanted to remove “discriminatory” exceptions that put the burden on Bermudian businesses.
Mr Mathias added: “This preferential treatment, seen from the point of view of the European Union and the OECD, could get us classified as a tax haven.”
Jeanne Atherden, leader of the party, said the Government had failed to reduce healthcare costs and introduced new taxes that would target small Bermudian firms.
Ms Atherden added: “The Premier was happy to introduce some payroll tax relief in his Budget earlier this year and boasted about how it would give people more money. “Would he like to tell us how much of his much vaunted relief has now been wiped out and how much extra people are paying because of all the cost of living increases?”
She said the current administration was quickly becoming a “tax and spend” Government.
Michael Dunkley, Shadow Minister for National Security, added: “With available economic indicators such as the recently released Retail Sales Index showing the potential slowdown or even retraction of the economy and the fact that business costs continue to rise, with general increases in overheads including electricity and Government fees, this hits local businesses hard.
“It is discriminatory, unfair and create inequity as exempt companies and companies listed on a recognised stock exchange are not liable for the new tax.
“This tax may not be felt straight away, but people need to start waking up to what is happening and ask: is this Government really putting Bermudians first?”