Cab drivers are to pick up savings this quarter with a payroll tax rebate, announced in yesterday's Budget.

Taxi operators have welcomed the exemption, which will save up to $500 for each full-time driver.

Finance Minister and Deputy Premier Paula Cox said yesterday: "The taxi sector has made strong representations for relief and a special temporary measure will be introduced during this session to exempt the taxi sector from payroll tax for the tax period beginning January 2010.

"The relief will take the form of a rebate of payroll tax paid by taxi owners, taxi drivers and specified taxi dispatchers for that tax period."

Gilbert Trott, president of the Bermuda Taxi Association, welcomed the news. Mr. Trott was among the BTA executive committee members who met Ms Cox last summer to urge financial assistance.

"We're extremely pleased," he said yesterday.

"We've been experiencing some very, very difficult times, particularly with the downturn and the economy, and the lower numbers of tourists. We were really feeling the pinch.

"We made presentations directly to the Finance Minister and are very pleased she has found favour and understood our plight."

Mr. Trott said the payroll tax relief would amount to $490 for each full-time taxi driver.

He said: "It will help tremendously. This is the worst time for the industry I've ever experienced, and I've been in business full-time for 15 years."

A Ministry of Finance spokeswoman said last night: "The payroll tax relief to the taxi sector is a temporary measure for the tax period January to March 2010.

"In meetings with representatives of the taxi industry sufficient evidence was presented to the Ministry of Finance to show that the industry was being squeezed financially by low visitor numbers and high fuel prices.

"If the payroll tax relief measure is taken up fully by the taxi sector the value of the concession could be slightly in excess of $1 million."

Bermuda has up to 600 taxi permits and costs for operators can top more than $150,000 for the vehicle and permit.