The Senate yesterday agreed to grant restaurants a break from paying Customs duty on improvements they make to their premises.

The (Temporary Customs Duty Relief ) Bill 2002, which will cost Customs an average of $400,000 losses in revenue every year, was passed without any opposition in the Upper House.

Government's speaker on finance in the Senate, Patricia Paris, said the objective of the legislation was to assist restaurateurs to raise the quality of their facilities to improve the standard of physical amenities in Bermuda's hospitality sector.

And she said it was similar to the Hotel Concessions Act, which had assisted hoteliers to improve their properties for 11 years.

She said: “Many restaurants use the seasonally slow first quarter of the calendar year to carry out their renovation work.

“As promised, this legislation takes this into account by providing relief retroactively back to January 1, 2002.”

And she said licensed restaurants with adequate supporting documentation showing that they carried out renovation work earlier this year will be able to apply for a refund of Customs duty paid on imported capital goods.

She added: “Local suppliers will not be disadvantaged in that they will be able to receive a refund of duty paid on goods when the duty relief is passed on to restaurants.”

She said the act was another component of the Government's commitment to reinvigorate the tourism industry in Bermuda.

United Bermuda Party Senator Kim Swan said the Opposition supported the legislation and recognised that restaurants outside of the hotel sector needed to be placed on a level playing field.

But he said the restaurants also faced many problems from an operating standpoint, and the concessions act would not necessarily see profits rise.

Sen. Swan said he was concerned that the tourist season had “shortened” and now only coincided with the cruise ship season, which is from late April to October.

He said in years gone by, the holiday season used to be from March to November, and Government should take steps to widen it again by encouraging more tourists to arrive at the start and the end of the year.

In response, Leader of the Senate, Colonel David Burch said the duty relief could only enable restaurants to better compete with their peers in the food trade.

He said: “It does not offer profitability and viability. That's not our job.”

He said the Opposition needed to realise that there was a whole new approach to the marketing of tourism.

He said: “If you would listen and learn and realise there is a change in the whole process of marketing tourism.

“We don't talk about the off season. We talk about the shoulder season. The message we are sending is that Bermuda is open for business all year around. Stop referring to the off season - it don't exist no more.”

Independent Senator Walwyn Hughes said he thought the concessions act was a good concept.

He said: “I think they (restaurants) should be pleased they have the opportunity to improve their physical plant.”

However, he said he believed it would be very difficult for Customs or Government to estimate how much revenue it was likely to lose a year, but said the Minister of Finance would have the discretion on which applications would be accepted and which would not.

Restaurants can make applications by submitting a list of capital goods they require for an improvement scheme to Minister of Finance Eugene Cox.

The Act will provide Customs duty relief for restaurants until December 31, 2004.