Pre Budget Report
Government mulls new taxes before Budget day
New taxes could be in the pipeline for the 2019-20 Budget, the Minister of Finance said yesterday.
Curtis Dickinson said in his pre-Budget report that possible taxes included one on homes where the main function was for rental to tourists or to employees in international business.
Other proposals included a 5 per cent general services tax on goods and services and a 7.5 per cent tax on professional services.
Mr Dickinson said: “This document will provide everyone with an opportunity to understand the focus on the next Budget and to allow us to hear from you, from the people of Bermuda, your thoughts and concerns.”
Mr Dickinson said that the Government’s Budget process was “clear and transparent”.
He added: “Our pre-Budget report explains the factors driving the Government’s fiscal policy decisions while giving everyone the opportunity to make their views known.
“We anticipate that this report will give the public a better understanding of our aims and objectives as well as encourage debate on the Budget strategy and how effectively it copes with current economic and social priorities.”
Mr Dickinson said that the Budget would be unveiled on February 22.
The rental income tax would be applied as a percentage of the annual rental value of properties, although a proposed level was not suggested in the report.
The document also outlined a general services tax of 5 per cent to be applied to “non-essential services, including catering, insurance, vehicle repairs, air tickets and so on”.
Bob Richards, Minister of Finance in the former One Bermuda Alliance government, proposed a 5 per cent general services tax in his 2016-17 Budget statement.
A managed services tax of 7.5 per cent on “mostly professional services purchased from abroad” was also floated by Mr Dickinson.
A withholding tax on island-generated dividends and interest, “substantial increases” in the foreign currency purchase tax and increases to financial services taxes, including bank and insurance fees, were also proposed.
Changes to the payroll tax system “to make it somewhat more progressive, both at the company and the individual level” were also included in the report.
Possible changes to customs duty were also highlighted in a bid to make “reductions in duties on food and clothing, and increases in alcohol duties”.
The bipartisan Tax Reform Commission tabled a report last November which proposed new taxes along with reforms to existing taxes.
The commission’s report predicted alterations could boost government revenues by $147 million over two to three years.
Mr Dickinson said that a series of meetings would be held with members of the international business community, the Chamber of Commerce, local businesses and union leaders as part of a consultation period which will run to the end of the month.
Members of the public can send their questions, comments and concerns to firstname.lastname@example.org.
To read the pre-Budget report and the minister’s statement in full, click on the PDFs below “Related Media” in the online version of this story