If Bermuda is serious about long-term fairness, it needs to consider a broader-based income tax, the Premier said yesterday.

Speaking at the end of a press conference on the Pre-Budget Report, David Burt hinted at deeper potential changes to Bermuda’s tax system.

He noted that the Fiscal Responsibility Panel had “always” stated that tax reform had to be “along the lines of looking at a change in the system of taxation towards a broader based income tax”.

“Those words would never be uttered by a politician in Bermuda before,” he said.

“But now they’re coming from the bipartisan Tax Reform Commission, they’re coming from the Fiscal Responsibility Panel.”

Mr Burt said that if the island was serious about “long-term fairness”, then “that’s the direction of travel”.

The FRP said in its report: “The panel also acknowledges the potential merit of diversifying the tax base over the longer term, including a modest personal income tax or broader consumption taxes, provided that such measures are revenue-neutral and accompanied by reductions in other distortive taxes such as payroll levies.”

But it added a caution: “In light of the very large task of implementing the CIT, any further major tax reform should not be undertaken in the short run — until the operation of the CIT is well embedded.”

The Tax Reform Commission did not explicitly endorse income tax, noting proponents cited its fairness while objections were based on the difficulty and cost of collection, but said it should be explored.

“At present, insufficient data is available to model and assess the cost vs. benefit of developing and implementing a comprehensive personal and corporate income tax system in Bermuda,” it added.

In its executive summary, it said: “The TRC strongly believes that Bermuda should explore the merits of a low-rate, broad-based income tax system, while maintaining Bermuda’s international standing.

“Our intent is not to increase the overall tax load on the average taxpayer, but rather to allow for a more equitable and granular execution of tax policy.”