Targeted tax cuts designed to boost the take-home pay of workers and stimulate economic activity were given the green light by MPs last night.

The Payroll Tax Amendment and Validation Act 2026 was passed in the House of Assembly with no objections.

It would bring into force tax cuts outlined in the 2026-27 Budget Statement.

Presenting the Bill, Wayne Furbert, the Junior Minister of Finance, said: “No business in Bermuda will pay more in employer payroll tax under this Budget and no worker will pay more in employee taxes.

“Every employer rate will either remain at its current level or will decrease.

“Similarly, the total tax bill for every worker on this island will go down.

“This Bill is the mechanism by which we will fulfil that.”

Many of the 14 categories of employer payroll tax listed in the Budget Statement would be calculated at a lower rate and most will have rates of 7 per cent or less.

Large local companies with annual payroll greater than $1 million would see their rate decrease from 10 per cent to 9.5 per cent under the amendments, and international businesses with exempted undertakings can expect a reduction from 10.25 per cent to 9.75 per cent.

Mr Furbert said the Bill also introduced new-hire relief to eligible companies.

Douglas De Couto, the Shadow Minister of Finance, said that while the One Bermuda Alliance supported the tax cuts, there can only be so many before there is nothing more to cut.

“You need to have the growth with the cuts,” Dr De Couto said.

“The OBA’s approach is, yes, let’s do some of those cuts but we would love to see growth.

“We would like to see more initiatives for growing the economy.”

Dr De Couto described the Budget as “a lost opportunity”.

He questioned why the new-hire relief was only for companies and businesses with payrolls exceeding $500,000.

Mr Furbert responded: “This initiative took place back in the first Budget by this Premier and it is something we concentrated on.

“That’s where we stood at the time and that is there we still stand. It stimulated the economy significantly for that period.”

Dr De Couto added: “We also think that the employer portion should be put on a tiered approach like the employee portion.

“There are businesses suppressing their growth to avoid taking a higher tax rate.”

He said some could pay more and some should be paying less.

David Burt rose to his feet to say that the Progressive Labour Party had “consistently” reduced taxes.

The Premier said that the country had gone from having the highest payroll tax rates for workers in history under the OBA to the lowest, under the PLP.

Mr Furbert told the House: “This is a Bill to support all workers. It is a Bill that rewards job creators, honours our elders and provides direct financial relief to the thousands of Bermudians who keep this island running every day.”

Mr Burt, in a statement released later, said: “When our economy grows, Bermudian families should feel that progress in their wallets.

“These payroll tax reductions mean more take-home pay for workers.”

The Government noted that the changes reduce employee payroll tax rates in the first two income bands, which would mean that every worker in Bermuda will pay less payroll tax and take home more of their earnings.

Mr Burt added: “At a time when many families are facing pressure from the cost of living, this, the largest payroll tax cut in history, will help ensure workers keep more of what they earn while the Government continues to manage Bermuda’s finances responsibly.”

The payroll tax reductions are scheduled to take effect on April 1.