Government and the public pension funds are owed almost $39 million by employers who have not paid their pension contributions and payroll and land taxes ? a situation that is ?intolerable?, Auditor General Larry Dennis has stated.

Employers must pay up and Government must crack down on those who do not, he added ? but he enthusiastically applauded Government initiatives targeting the problem that were announced as he was finalising his report.

In late January, 2005 Minister of Finance Paula Cox and Attorney General Larry Mussenden announced the formation of a Debt Enforcement Unit dedicated to helping the Tax Commissioner and the Director of Social Insurance chase after delinquents with ?effective legal support?. In previous years despite the Tax Commissioner?s enforcement efforts, the Attorney General?s chambers had been reluctant to get involved in debt collection, while the Solicitor General had noted that more staff and resources were needed to give debt collection the attention it deserved.

Giving the creation of the Debt Enforcement Unit his full support, Mr. Dennis nevertheless said he would continue to demonstrate to legislators the extent of the arrears.

?Consistently allowing arrears of this magnitude to persist has, in my view, bred a culture in Bermuda wherein businesses and others view the payments of amounts owing Government as optional or evadable,? he said. ?By not enforcing payment of pension contributions from employers, Government is in effect colluding with deadbeat employers who are lining their own pockets at the expense of their workers? future pensions.?

Not only could the $39 million be put to good use by reducing borrowing costs or providing investment opportunities for the pension fund, Mr. Dennis said, but employees might not receive all the pensions they have paid for. ?If their employers do not remit their pension deductions plus the employers? portion, there is no pension entitlement,? he wrote in the 2004 Auditor General?s Report into the Accounts of the Government of Bermuda.

?Employers who are slow or fail to remit payroll taxes and pension contributions, in effect, borrow at no cost from Government. These employers, therefore, have an unfair competitive advantage.

?I have reported previously on the systemic problems that are hindering the efficient collection of these debts. I have also stated publicly on numerous occasions that, in my view, Government is far too tolerant of employers who consistently ignore legislated collection and remittance requirements.?

The Public Accounts Committee has also called on the Minister of Finance to support the Tax Commissioner in her efforts to speed up the purchase and installation of a new $4 million accounting software package, rather than spreading it out over three years as the Ministry has previously declared.

Payroll Tax Remittances in Arrears ? top ten employers who as of June 30, 2004 were more than 90 days in arrears on payroll tax

Hamiltonian Hotel and Island Club: $439,813

Milligan-Whyte and Smith: $390,067

Fine Touch Construction & Maintenance Ltd.: $368,476

Sea-Land Construction Co. Ltd.: $253,810

Guardwell Security Services: $172,085

Creative Accents Limited: $149,194

Premier Homes: $146,192

Carlsen Phillip Barristers & Attorneys: $134,595

Paul?s Home Improvement: $132,600

Bermuda Energy Conservation Ltd.: $125,765

Pensions Contributions Remittances in Arrears ? top ten employers who as of July 31, 2004, were more than 90 days in arrears in respect of contributions towards the Contributory Pension Fund.

Hamiltonian Hotel and Island Club: $207,349

Health Tech Limited: $146,219

Pro-Active Management Systems: $107,141

Beeline Transport Ltd.: $106,779

Village Carpentry Ltd.: $105,666

Bordens Carpentry & General Maintenance: $87,877

Salisbury Construction Co. Ltd.: $75,373

C&N Construction: $73,981

Carlton R.N. Limited: $70,029

Lighthouse Lounge: $68,009

Land Tax Remittances in Arrears ? the complete list of employers who as of June 30,2004 owed more than $40,000 in land tax and were more than 90 days in arrears

Hamiltonian Hotel and Island Club: $271,502

David and Donna Dunkley: $137,798

Conrad Henry: $51,828

Pembroke Company Ltd.: $43,059