Bermuda?s business community yesterday said it was happy to see the some of the weight of the payroll tax burden shifted off small to medium-size business with Government?s announcement of a new tiered system to benefit smaller operators.

Indeed, there was little for business to object to in the budget delivered by Finance Minister Paula Cox yesterday.

Retailers were given the concession of being able to open on Sunday afternoons, restaurateurs saw concessions extended a further four years, and the Island?s smaller firms will see reduced payroll tax levels.

Businesses will be impacted by having to step up their social insurance contributions on behalf of employees, but not until later in the year with the 4.75 percent increase not going into place until August.

Association of Bermuda International Companies (ABIC) chairman David Ezekiel said: ?Let me start by saying that the construction of the 2005/2006 budget certainly enhances Minister Cox?s reputation as a thoughtful and able Parliamentarian.?

Mr. Ezekiel said the budget was in line with expectations as Ms Cox had indicated to the body in pre-budget meetings that there would be little to impact international business.

?I am glad to say that our expectations turned out to be accurate and that the Minister has given due regard to the organic growth within the industry and has, thus, avoided any substantial tax increases,? he said.

Head of the Chamber of Commerce Charles Gosling said he and his Chamber colleagues were ?particularly happy? about the three concessions given to businesses in this budget.

In addition, the Chamber has long called on Government to look for other sources of revenue outside of increasing taxes on business, which Government has done in this budget.

The first concession, lifting a ban on retailers being barred from opening on Sundays, was something Mr. Gosling said he and his Chamber colleagues were glad to see made ?history?.

Finance Minister Paula Cox yesterday said the ?relaxation? of Sunday and trading rules for retailers would have to strike a balance between giving retailers greater flexibility while being fair to employees.

Although announced last year, restaurateurs will also be glad to have formal acknowledgement of an extension to 2009 of ?The Restaurant Concessions Act?, Mr. Gosling said.

Perhaps the biggest impact to businesses from the budget will be a change to the payroll tax structure, which is being revised to levy a lesser tax rate on small to mid-size businesses.

Mr. Gosling said: ?This is going to be a great, great boon to small business on the Island.?

All three measures were ones that the Chamber has doggedly lobbied for in the past several years. Mr. Gosling said passage of each was a ?ringing through, loud and clear, of the Chamber acting on behalf of its members?.

Government?s decision not to hike payroll tax rates may well be the result of it underestimating the return from an increase to the tax rate in the 2004/2005 year.

Yesterday Ms Cox revealed that Government was estimated to take in $44 million more in revenue than expected, for a grand total of $738 million for the last fiscal year.

A large percentage of that came from payroll tax receipts which were said to have brought in $28 million more than the expected $220 million. For the coming 2005/2006 fiscal year, Government said it expected payroll tax remittances to rise to $250 million.

Much of the additional revenue last year and this year on the payroll tax side is likely to have come from the international business sector which was said in the budget to have seen strong growth in jobs, making it the largest local employer after Government.

In total, employment in this sector reportedly increased 8.3 percent to 4,096 jobs.

Mr. Ezekiel lauded Government for not increasing payroll tax rates and leaving alone a salary cap that sees executives pay the tax on earnings up to $235,000.

?It is also pleasing to note that further work is being done on the tiering of payroll tax rates in order to assist small businesses, both within and outside the international business sector.?

Greg Haycock, chairman of the Bermuda International Business Association (BIBA) called Government?s budget ?well-balanced? and said the new tiered payroll tax system would aid business development.

?We believe that this will serve to take some of the pressure off small and medium size businesses allowing them the breathing room to develop,? he continued.

The Bermuda office of accounting firm Deloitte said in commentary within their annual summary of the budget that ?the Minister of Finance continues to be in the enviable position of not having to increase taxes as employment increases and many taxes, such as payroll tax and custom duties increases naturally with economic expansion and inflation?.

Although the payroll tax rate is not being increased ? indeed the tiered system lowers the tax burden for some ? social insurance rates will rise by 4.75 percent in August.

The timing coincides with Government?s second boost in two years of senior pensions, with the rate due to rise a further 3.5 percent that same month. Government also said it would set up a ?Birthright Fund? with $1 million in seed money to be invested for future generations of Bermudian pensioners.

Mr. Gosling said he recognised ?there is a need to fund the increases in the pensions being paid out?.

Mr. Haycock said: ?As the association which promotes Bermuda as a financial centre, we were particularly pleased to see that the Government took on board our concerns about the need to remain competitive as regards the cost of doing business here and that the only increase in tax to businesses will be social insurance in August of this year.?

In regards to social insurance funds, Mr. Gosling called for transparent handling of those monies. ?What we would like to see done with the Bermuda Birthright Fund when it becomes established, as well as the whole social insurance programme, is that it be separated from the General Reserve.

?Once there, it can easily be hidden by ?smoke and mirrors?. These two particular programmes are really investments that Bermudians are making for their later years. Those really need to be under a completely separate system of checks and balances.?

In delivering her latest budget, Ms Cox also spoke of Independence and said stakeholders ? which must include those running businesses in Bermuda ? had called for Government to make sure the debate over whether or not Bermuda should go Independent should be an open, public dialogue.

She said yesterday that Government expenditure in the coming year included a provision for ?fact-finding and providing answers to all the questions that reasonable people might have about self-determination for Bermuda and Bermudians?.

Mr. Ezekiel said he was ?encouraged? to hear Ms Cox saying she was behind an open dialogue from all stakeholders.

?ABIC continues to believe that this dialogue will proceed in an open and healthy environment so that Bermudians are in possession of all the facts when they come to make their own personal decision on this issue.?

Mr. Gosling concluded: ?I can see that Government is pushing forward aspects of the social agenda.?

But he raised concerns on only nine percent of the capital expenditure this year being earmarked for new projects.

?Everything else is for old projects. I guess there is a little concern that we are moving from capital projects to the forming of capital bureaucracies to carry on the social agenda.?

However, Mr. Gosling said, on balance, it was a budget that made the business community, ?very happy?.