House approves Payroll Tax rollback – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

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House approves Payroll Tax rollback

A rollback of Payroll tax was approved yesterday in the House of Assembly, along with an extension of tax exemptions for international business and customs relief for retailers.

The three financial acts were all passed by unanimous decision, and are intended to help boost the suffering economy.

The Payroll Tax Rates Amendment Act, as announced in the 2011 Budget, reduced payroll tax from 16 percent to 14 percent. Premier Paula Cox said that the rollback would put $50 million back into the economy, but the act will benefit employers more than employees.

While Shadow Finance Minister said he supported the act, he criticised the Government raising the rate last year, calling the decision a costly mistake.

Also passed was the Exempted Undertakings Tax Protection Amendment Act 2011, which extends a guarantee that the Bermuda Government will not charge exempt companies any taxes on profits, income or capital gains.

The amendment prolongs that guarantee until 2035.

While Premier Cox said the Government had no intention of starting taxation based on profit, income or capital gains, she said the amendment was meant to reassure businesses and make them more comfortable investing in the Island.

She said that extending the agreement had always been on the Government agenda, but had been put off in the past because of international concerns that the exception could lead to harmful business practices, favoring international businesses over local.

“I suppose that was one issue that was quite bedevilling,” she said. “We had to move very carefully. We have worked to position Bermuda into a much more favourable light.

“Now we've have a more level playing field than we had before. Bermudians with exempt companies get the same benefits as international exempt companies,” she said.

A third bill, titled the Retail Shops (Temporary Customs Duty Relief For Capital Investments) Amendment Act 2011, was also passed.

The amendment extends the time period that business can get customs duty relief for capital purchases.

Since 2008, retailers have saved a total of $420,000 in duty on capital purchases for renovations or refurbishment.

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Published March 03, 2011 at 9:15 am (Updated March 03, 2011 at 9:15 am)

House approves Payroll Tax rollback

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