providing services to exempt companies, rather than charging them a flat fee on each transaction.

Finance Minister the Hon. David Saul formalised the change in his Budget plans in the House of Assembly last night.

Dr. Saul withdrew The Corporate Services Tax Act 1995 -- which provided for the $400 flat fee -- and introduced the Corporate Tax Act 1995.

The new bill, which is yet to be debated in the House, provides for a four percent tax on gross revenues a company earns from an exempt company.

Services subject to the tax include administrative, management, and secretarial services and provision of a registered office. Also taxed are revenues received for director's services, where the director is an owner, officer, or employee of a business providing corporate services.

Payments for someone acting as "resident representative''' are taxable, as are those for accounting and financial services, with the exception of audits of financial statements.

Banking services are exempted, as are payments for the management of an insurance company by a local company.

Earlier this week, Dr. Saul told The Royal Gazette he was considering such a change.