The United Bermuda Party has detailed how it plans to fund an estimated $20-22 million in tax cuts.

A key tenet of its election platform is to abolish payroll tax for those earning below $42,000 per year. Currently employers pay Government payroll tax of up to 13.5 percent of an employee's earnings and can deduct up to 4.75 percent of this sum from their employee to put towards that bill.

Under the UBP plan, an employer would not be able to recover the 4.75 percent from any employee earning less than $42,000 – meaning the low-paid employee would have up to $1,995 extra in their pocket annually.

Employers would not be expected to increase their contributions but Government would pick up the tab, which was originally announced to be $29 million. However, UBP finance spokeswoman Patricia Gordon-Pamplin announced yesterday that following more detailed analysis of salary levels, a more realistic figure is $20-22 million.

According to Bermuda College economics lecturer Craig Simmons, the tax cut would benefit just under half of all black Bermudians and women in the work force and the wide majority of young people.

Askd how the cut would be funded, Mrs. Gordon-Pamplin said a United Bermuda Party Government would cut 50 percent off the Government travel budget, which was $6 million for 2006-07 under the Progressive Labour Party administration.

She pledged to slash the budget figure of $66 million on professional services and consultants by 25 percent. In addition, there would be a 50 percent saving on communications spending, where the current budget is $13.6 million. The Government TV station would be abolished along with the positions of Chief of Staff and Press Secretary to the Premier.

There would also be a 25 percent cut in Ministerial salaries, and another $10 million saved through opting not to fill vacant positions – although not in essential areas such as the Police and the hospital, she said.

The payroll tax plan came under fire this week from Finance Minister Paula Cox who denounced it as an election stunt that "seems to have more holes than Swiss cheese and to smack of income tax without calling it that".

Hitting back yesterday, Mrs. Gordon-Pamplin said: "I want people to understand that there is a fundamental difference between the United Bermuda Party and the Progressive Labour Party on this issue.

"We believe we should leave as much money as possible in the hands of people so that they and they alone, determine how their money is spent. We trust people to know what to do with their money, so our approach is to collect only what the Government needs in tax revenue.

"Over the last nine years, the PLP approach has been to overtax people, to stockpile the money and then decide how to spend it. For example, in the three years between 2002 and 2005, the PLP Government collected $145 million more in payroll tax than they needed.

"We want to lower taxes for our people. People need help with the cost of living, and we are going to do something about it, but it doesn't stop there. We will help people in other ways – with free public transportation for all school children, prescription eye glasses and dental care for seniors who cannot afford it and financial assistance with day care support."