David Burt, the Premier and Minister of Finance, has made it clear how his government is at odds with the views of the Fiscal Responsibility Panel — even as he separately hinted at the possibility of a future income tax regime for Bermuda.

It came during Mr Burt’s press conference to release the pre-Budget report in advance of fiscal year 2026-2027.

The FRP’s annual report was also released to journalists today, including an assertion on how the panel members found it “very unambitious” that the Tax Reform Commission proposed that the Government should aim to reduce net debt by (only) “half over ten years”, while using some of the CIT money for social programmes and tax relief.

Even a schedule of $510 million in allocations to support employers, employees and seniors, together with the elimination of the foreign currency purchase tax, they said, should still leave room for significantly faster debt reduction.

There was also concern that what would amount to a government stimulus could easily fuel inflation and risk macroeconomic instability.

The FRP has long advised that Bermuda’s windfall from corporate income tax should not be used for everyday Bermuda government expenses — that there should still be a surplus or balanced budget without CIT revenues.

Even this year, it again argued that CIT revenues should be expressly used for debt reduction and targeted capital allocations.

It argued that the Government should adopt a rule that the CIT revenue should only be used for debt service, debt reduction and/or the acquisition of financial assets.

But the Government has said it would use 70 per cent of the CIT revenues for those purposes over a rolling period of three years.

The second Government rule states that “the current budget should remain in balance or surplus, excluding CIT revenues, capital spending, interest payments and structural transformational investment/healthcare”.

That contrasted with the FRP’s proposed rule which stated that it should be in balance or surplus, excluding CIT revenues, capital spending and interest payments.

But the Premier told a pre-Budget press conference today: “Their [the FRP] view that corporate income tax revenues themselves should be just kept separate does not accord with the policy view of the Government of Bermuda, because at the beginning of this we said that it is our view revenues from corporate income tax should be used to reduce or lower other taxes which increase the cost of living in Bermuda.

“The Fiscal Responsibility Panel has a far more cautious [view] to say that these revenues should be segregated — we don’t believe so — and that the regular budget, the regular taxes … should largely fund current operations.”

But the panel is also critical of Bermuda’s method of publishing economic statistics: “after a long delay, and then facing significant revisions”.

The FRP report said: “This complicates the task of this panel in assessing the state of the economy and more seriously fiscal and macroeconomic management more generally.

“It would be prudent to invest further in this area, seeking additional specialist and technical assistance as necessary.”

But the Government was in agreement with the panel on the potential efficacy over the long term of introducing what the panel called “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”.

The panel added that any such changes should not be implemented in the short run until the operation of the CIT was well embedded.

Mr Burt agreed today: “There has to be a path towards getting there.”

Looking forward, the panel raised several other concerns but noted: “Bermuda’s fiscal position looks far better than at any point in the past decade, in large part as a result of the introduction of the CIT, which represents a defining opportunity for Bermuda to consolidate two decades of fiscal progress and to lay the foundation for long-term sustainability.”