Senior members of the Chamber of Commerce's international companies division (ICD) will meet with Finance Minister Eugene Cox this month to voice concerns ahead of Government's release of the new Budget in February.

ICD chairman David Ezekiel yesterday said the ICD contingent will lobby Government on monetary issues that affect the sector.

And at the top of the list of concerns will be the hefty payroll tax burden that international business has borne since a change in reporting methods two years ago.

Total revenue for the 2000/2001 fiscal year, which ended on March 31, 2001 was $30 million higher than Government's estimates. Of that $30 million, there was a $20 million increase in payroll tax receipts for the period and much of that increase has been attributed to changes in the payroll tax structure instituted in 2000, which resulted in hefty increases for international businesses.

In that year, payroll tax saw an increase of one quarter of one percent and Government announced payroll tax changes to bring international business under the same payroll tax format as local businesses. This move saw international businesses having to report on actual payroll amounts, rather than an assumed figure of $70,000 - up to a cap of $250,000.

After outcries, Government, last year, moved the cap down to $225,000. But, Mr. Ezekiel described the impact of that change negligible and is calling for a more significant lowering of the payroll tax cap.

Mr. Cox would not be drawn on whether or not there would be any further breaks on payroll tax for the international business sector.

he said the purpose of the shift to reporting on actual rather than assumed salary amounts was to ensure that Bermuda was not seen as a tax haven, but he conceded that the change had hit some international companies badly.

Mr. Cox said: “Obviously, the finance minister is not going to be saying what he is going to do. But, yes, a few years ago we tried to bring notional salaries in line with average salaries. And we took, from our information and records, a figure that had been prescribed by people in the industry, and when this was put in place it did realise more than we had anticipated. And in the last Budget we did modify that to a lower value, but of course, I am not going to say what we are going to do in this Budget, that is confidential information.”

But, Mr. Ezekiel said: “It could be said that Government has had a substantial windfall from payroll tax, over the last few years,” adding that increased fees and taxation is an issue for international business as it strives to remain competitive.

Mr. Ezekiel said the ICD actively lobbies Government throughout the year on a number of issues. But, at this time, he said the focus will be monetary issues: “We have an ongoing dialogue with various Ministries, whether it be Finance, or Labour and Home Affairs, but coming up to the Budget our focus is meeting with the Finance Ministry.”

Parliament reconvenes on February 8 and it is expected that the Budget will be unveiled shortly thereafter.