Bermuda's embattled retailers will soon receive $2.4 million in payroll tax concessions in an effort to bolster sector businesses struggling to cope with the post-September 11 recession.

Yesterday, the Senate passed the Payroll Tax Rates (Special Provisions) Act which significantly reduces payroll taxes paid by Island retailers and restaurants.

Government Senator Patrice Parris told the Upper House that the tax relief is intended as a temporary measure which may be implemented retroactively.

Sen. Parris said businesses with an annual payroll of under $200,000 would have the rate of payroll tax payable to Government reduced from 7.25 percent to 5.25 percent while those with payrolls between $100,000 and $200,000 will have the rate dropped to 7.5 percent from 9.5 percent.

And retail businesses with payrolls greater than $200,000 will see the greatest relief with their tax burden falling from 12.75 percent to 7.75 percent.

The tax break is to take effect no later than January 1, 2002 and will apply for a three-month period, she said.

Opposition Leader in the Senate Kim Swan said the move was welcome and pointed out the retail and restaurant sector had been hurting for some time before the September terrorist attacks.

And he called on Government to show fiscal leadership by cutting down on excess spending.

"This has to be supported because retailers are really hurting," said Independent Senator Walwyn Hughes.

But he said Government was in a catch-22 situation because, although $2.4 million seems like a lot of money, when it was spread around the businesses it would amount to only a $40 to $50 savings per week for each company.

"But Government is not in the position to give the shop away," he said.