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Customs break for telephone companies

Shadow Finance Minister David Burt called for a review of Bermuda's tax system, as MPs debated legislation granting customs relief to the telecommunications industry.

Mr Burt claimed the Customs Tariff Amendment (No 2) Act 2013, which was passed during Wednesday's session in the House of Assembly, highlighted the fact that the One Bermuda Alliance was “very good at giving concessions to everyone in business who asks for it” but was doing little to help the average public sector worker, who was dealing with less pay and high living costs.

“The people are listening and they want to know where their concessions are,” he said.

The Progressive Labour Party MP quoted Finance Minister Bob Richards as saying “on numerous occasions” that now was not a good time for a review of the taxation system.

“I must challenge the Minister to say if you continue to give concessions, you are going to continue to rob the Treasury of money it could earn,” he said.

Mr Richards said the long-term effect of granting customs relief to businesses would be to create jobs, thereby helping the average Bermudian.

Earlier, he told MPs that the Act would give 100 percent customs duty relief on the importation of goods for “integrated electronic communications networks operated by companies holding an integrated communications operating licence (ICOL)”, awarded by the telecommunications regulatory authority.

The Minister said: “The regulatory authority enables competition in the communications sector by facilitating market entry through ICOLs to provide networks and services and by regulating access to networks, so as to develop effective choice for consumers, both business and residential.

“To date, the authority has converted the telecommunications licences of some 20 entities to ICOLs.

“Honourable members will appreciate that the cost to ICOL holders of establishing and operating is significant. In order to assist the regulatory authority in its mission, it is proposed to provide complete duty relief on electronic communications equipment, apparatus and machinery imported by ICOL holders or their agents.”

He said the goods would have to be imported and used only to build, extend or maintain infrastructure for operating telecommunications networks.

The legislation also grants relief to the Friends of Bermuda Railway Trail for the importation of materials to reconnect and improve the trail in Hamilton Parish between Shelly Bay and Coney Island.

Mr Richards said the Friends had secured $685,000 in donations to carry out the project and the duty relief would cover items including bridge spans for pedestrians, pedal bikes and horses; cycle rails; diving boards; heavy duty trash cans; benches; picnic tables and other outdoor furniture; plaques for signage; and large tubes for potential tunnels.

Opposition leader Marc Bean said the trail was a “treasure” and he had no issue with the relief proposed.

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Published October 04, 2013 at 9:00 am (Updated October 04, 2013 at 1:05 am)

Customs break for telephone companies

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