The decades-old 60:40 rule designed to guarantee Bermudian majority ownership of companies is to be axed and no new taxes will be imposed.Curtis Dickinson, the Minister of Finance, said in his Budget Statement that the 60:40 numbers would be reversed, which would allow up to 60 per cent foreign ownership of island-based businesses in an attempt to boost overseas investment in Bermuda.However, he added that the requirement for boards of directors to be at least 60 per cent Bermudian would remain.Mr Dickinson said legislation to mandate the change would be tabled in the House of Assembly in the 2020-21 financial year.He told MPs that “a series of selective tax cuts” would be introduced to reduce payroll taxes for people earning less than $96,000 a year — and bring the tax rate in the band up to $48,000 “to its lowest level ever” — from 4 per cent to 2 per cent.Mr Dickinson said: “The objective of this initiative is to put money into the pockets of the approximately 75 per cent of the employees in Bermuda.“The cost of this tax relief will be partially offset by modest increases in the employee portion of the payroll tax for those earning more than $96,000.”Mr Dickinson added that progress on a plan announced in last year’s Budget to set up a pilot mortgage-guarantee programme with private-sector banks had been “slow”.However, he said a 15-month deal had been struck with a Bermuda bank to deliver lower finance costs for people looking for mortgages of $750,000 or less.He added that a union deposit company, which would offer mortgages, was also under consideration and that $250,000 had been earmarked for the creation of a business plan.Mr Dickinson added that start-ups and co-ops set up to supply groceries at lower cost in partnership with Financial Assistance were also being looked at.New legislation will mean grocers must report their prices to the Government, which will release the information to the public in a mobile app.The government department with the biggest cut is the Bermuda Police Service, which will have $4 million trimmed from its previous $65.8 million budget for the 2019-20 financial year, a 6 per cent reduction.Mr Dickinson said that the Ministry of National Security had started a drive to “better align funding with strategic and operational priorities”.He added: “This has been achieved by reallocating funds from the Bermuda Police Service, while still fully maintaining frontline police levels and capabilities at current levels.”He highlighted a $1 million saving from lower costs for public safety radios.Mr Dickinson added that the Government would “restructure” the Bermuda Tourism Authority to “focus more directly on its sales and marketing role”, and “devise and introduce a slate of annual events that drives visitors to Bermuda and better reflects our claim to be a luxury destination”.He told the House of Assembly that the gross public debt was expected to be more than $2.71 billion on March 31, the end of the 2019-20 financial year.Total debt, net of the sinking fund, will be more than $2.67 billion — only $72.4 million below the debt ceiling.Mr Dickinson revealed that the total Budget for the next year will be just over $1.14 billion — a $30.9 million, or 2.8 per cent, increase over the original estimates for the last financial year.He said: “Revenues are forecast to rise by a modest 0.3 per cent, or $3.7 million, and the current account balance, before interest on debt and capital expenditure, is budgeted to be a surplus of $186.6 million.”Mr Dickinson added that the current account balance, after interest, was expected to produce a surplus of $65.2 million, a “slight decrease” in the $6.9 million compared with the 2019-20 Budget.He said that meant a Budget deficit of $19.8 million.Mr Dickinson estimated that government revenues in the new financial year would be just over $1.12 billion, a “modest” $3.7 million, or 0.3 per cent, higher than the original estimates for last year.He told MPs: “The most significant increases will be in relation to taxes on cruise ship passengers and uplifts to immigration fees.”However, he added: “Other than these adjustments, there are no new or increased taxes contained in the Budget for the upcoming year.“Rather, we will be providing payroll-tax relief to workers and to small and medium-sized businesses.“We will also extend payroll-tax relief to employers with payrolls of $500,000 and above for the creation of new jobs in Bermuda.”Mr Dickinson said the total impact of the payroll-tax cuts for employees and the small to medium-sized business sector was expected to be about $6.4 million.For people earning between $48,001 and $96,000 a year, the rate will be increased from 6.5 per cent to 8.5 per cent, but the reduction on the first $48,000 will mean an overall cut in tax paid.Those earning from $96,001 to $235,000 will pay 1.25 percentage points more, an increase from 7.75 per cent to 9 per cent.The biggest earners — people who take home more than $235,000 a year — will see their rate increase from 8.75 per cent to 9.5 per cent.Mr Dickinson said the changes were expected to cut the Government’s take from payroll tax by about $3.8 million.Payroll-tax relief will also be extended to employers with payrolls of $500,000 or more for two years in an attempt to stimulate jobs growth.Employers with wage bills of $200,000 to $350,000 will pay a 3.5 per cent tax rate — a 50 per cent reduction.Firms with a payroll of $350,000 to $500,000 will pay the tax at a rate of 6.5 per cent.Mr Dickinson said that the Government also planned to help the struggling retail sector through an expansion of the zero rate of customs duty to cover more imported hardware for the renovation and refurbishment of stores.He added that the customs duty deferral process would be made more “user-friendly”.Mr Dickinson explained: “This will assist retailers with their cashflow, as customs duty will not be paid up front, but rather after they have sold at least a portion of their goods.“Appropriate checks and balances will be put in place to mitigate the risk of non-payment of deferred duty.”Mr Dickinson said the sugar tax had raised an extra $4.7 million up to the end of last year and that the cash was expected to be used for health promotion.He added: “Although monies were earmarked for programmes to assist with healthy choices, the needs and demands for additional funding in the areas of mental health, public education and additional support services for young Bermudians who have aged out of the Department of Child and Family Services are considered higher priorities for the Government.”However, he said extra cash from the tax had been allocated to the Ministry of Health to pioneer a drive to add nutritional information to restaurant menus.Mr Dickinson added that a two-year review had been due of charges for government services, such as car licensing and a variety of permits, which went up 5 per cent in 2018.He said that “this government will not add to the cost of government services for the people of Bermuda. So, for the first time in 24 years, I am happy to let the people of Bermuda know that the Government will not be asking you to pay more to license your car”.Immigration fees, however, will go up by 5 per cent, although international company fees will not increase, in order to maintain the island’s competitiveness.Operating expenditure is expected to be $935.6 million in the new financial year, an increase of $5.7 million, or 0.6 per cent, over the previous year’s estimate.Capital expenditure — the cost of bricks and mortar investment — is expected to be $85 million in 2020-21, up $20.3 million from the estimate for the last financial year.Mr Dickinson said that the most significant item was the $3.2 million cost of the renovation of Sessions House and the relocation of the courts.Other major building upgrades are expected to cost $3.1 million, while $3 million will be spent sprucing up schools. Roadworks over the year are expected to account for $2.8 million.Mr Dickinson said: “While most of the planned investment is related to construction projects, there is a capital acquisition provision of $24.9 million, which includes IT developments across government ($9.1 million), new public buses ($4.1 million), and ferries ($2 million) and other vehicles to support public-service delivery.”• To access the 2020-21 Budget Statement in full, click on the PDF link under “Related Media”