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Senate: Commission on tax backed

Junior Minister of Finance Vance Campbell

Legislation to create a commission to look at changes to Bermuda’s tax system was today approved by Senate.

Government senator Vance Campbell said the Tax Reform Commission Act 2017 made provision for a short-term statutory body to examine tax.

The Junior Minister of Finance and Public Works told the Upper House: “Its mission will be to conduct a review of our system of revenue collection and taxation and to make recommendations to Parliament on revenue and tax reform that will make our tax system fairer and will enhance Bermuda’s international competitiveness to increase the number of jobs based in Bermuda.”

Opposition senator Nick Kempe said the One Bermuda Alliance supported efforts that require consultation relating to tax services.

But he added that some statements “seem contradictory from the outset”.

“Certainly we would have appreciated a bit more of a vision as to where the Government was looking to go here.”

He said the relationship between the cost to government and the revenue it collects from the tax paying public also had to be considered.

Mr Kempe added: “We can shift the taxes around all we want but if at the end of the day, we are increasing the burden, that’s going to simply offset increasing costs. That’s not a model that I would endorse.”

He also questioned how the commission would fit in with a commitment to a balanced budget by 2019.

Mr Kempe’s views were backed by fellow Opposition senator Andrew Simons and independent senator James Jardine.

Mr Jardine pointed out that the previous OBA government had budgeted for around $40 million in revenue from its proposed General Services Tax in its 2018/19 budget.

He added: “Obviously, if the Tax Reform Commission decides that that tax is not appropriate for whatever reason, then that’s $40 million that is going to have to be found from somewhere, which was part of the previous government’s drive to balance our budget by March 31, 2019.”

Mr Campbell, however, said the new commission was a good fit with the Progressive Labour Party’s 2019 budget commitment.

The PLP’s Jason Hayward said: “The majority of Government taxes come from the workers. Taxing labour directly is a prohibiter to growth. It’s a prohibiter to job creation in our economy.”

He added: “This tax reform commission should be welcomed because we haven’t fundamentally done a proper review of our tax system in decades.”

Other legislation passed included the Electricity Amendment Act 2017, described by Opposition senator Nandi Outerbridge as simple “housekeeping legislation”, and the Appeal Tribunals (Miscellaneous) Act 2017.

The latter paved the way for the Minister of Finance to determine the appropriate fee for appeal tribunal members.

Mr Campbell said fees of $100 per day for chairmen and $50 for members were “insufficient”.

He added: “Given the recent shift in enforcement action taken by the Bermuda Monetary Authority, together with the complexity of matters currently before the Ministry of Finance, it is proposed to amend the schedule to remove all financial services-related tribunals from the Act.”

Mr Campbell said the Ministry was having difficulty appointing tribunal members and added that the Act would allow for remuneration at “a prudent level, based on time spent and the complexity of the case”.

Opposition senator Andrew Simons supported the bill but described it as a stopgap measure.

He added that the problem of finding tribunal members was not limited to the Ministry of Finance.

He suggested a model where magistrates could address some of the appeals.

But Mr Hayward countered that it was more than just a stopgap measure and would ensure there is no backlog of appeal tribunals.

Mr Hayward said: “The days of qualified persons giving up their free time to serve the public interest is dwindling and almost past.

“As a result, there is a need for persons to be adequately remunerated for their services.”

Independent senator James Jardine also supported the bill but questioned how a budget amount would be allocated without set fees.

Mr Campbell responded that the Minister of Finance would consult the Attorney-General’s chambers to determine a “reasonable” fee which would be used to estimate a budget amount.