Tax Commissioner’s office to be automated by 2015
The Office of the Tax Commissioner will move to an automated system by 2015, Premier Paula Cox has announced.
The Ministry of Finance will move away from its “legacy tax system” which has been in place for 25 years. The manual system will be replaced in a phased operation over the next three to four years.
Ms Cox said: “This measure will provide a tax management information system based on technology capable of fully supporting integration with other systems throughout government.
“This measure will enable participation in further development of e-government initiatives, the development of a business registry and master person index, and prepare the Department to participate in Government's PATI initiative.”
Ms Cox said it would also help the Tax Commissioner collect outstanding taxes.
The process began with the development of the e-tax website, which allows people to file and pay payroll and land tax online. The automated system will provide additional channels for taxpayers to both file and pay their taxes.
The Office of the Tax Commissioner is Government's largest revenue generating department. It collected $483 million, or approximately 53 percent, of the Government's total revenue in 2009-2010. It is expected to generate $499 million of Government's total revenue in 2011-2012.
Payroll tax is the single largest revenue earner for the Government, raising $349 million in fiscal 2009-2010. It is expected to generate approximately $350 million in 2011-2012. Ms Cox said payroll tax relief for hotels would continue until March 31, 2012.
Restaurants are also eligible for payroll tax relief in January, February and March if they pay $200,000 or more in wages and salaries a year. Government will continue to waive payroll for trainees, interns and apprentices.
Ms Cox also outlined the different tiers of payroll tax.
She said the standard rate of payroll tax is 14 percent as of April 2011, down from 16 percent for the fiscal year 2010/2011. All other payroll tax rates will be adjusted downwards by the same two percentage points. The rate recoverable from employees will be set at 5.25 percent in 2011-2012.
The salary cap for payroll tax purposes will remain at $750,000, from April 1, 2011.
Payroll tax is chargeable on all exempt companies, Ms Cox said. It also applies to all local employers with annual payrolls of more than $1 million.
She added: “Rates other than the standard rate are charged depending on the nature of the business carried on by the employer or self-employed person or the size of payroll, as follows:
l Employers operating a hotel or restaurant pay at 9.75 percent;
l Bermuda Hospitals Board, the Corporations of Hamilton and St George, educational, sporting or scientific institutions, taxi drivers, fishermen, farmers, and horticulturists pay at 9.25 percent;
l An employer with an annual payroll of less than $200,000 pays at 7.25 percent;
l Employers with an annual payroll of $200,000 to $500,000 pay at 10.75 percent;
l Employers with an annual payroll of more than $500,000 and up to $1 million pay at 12.75 percent;
l Government, parish councils, Government boards, Bermuda College, schools, religious, charitable and cultural organisations and the Bermuda Festival Ltd pay at 5.25 percent.