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Bermuda set to face tax increases in Budget

Budget presentation: Bob Richards, the Minister of Finance (File photograph by Akil Simmons)

The island is likely to face a hike in taxes when Bob Richards, the Minister of Finance, presents the 2016/17 Budget this morning in the House of Assembly.

That assessment has come from observers ranging from Kendaree Burgess, the executive director of the Bermuda Chamber of Commerce, to economist Craig Simmons.

Mr Richards pledged a year ago to balance Bermuda’s budget in three years, requiring an increase in government revenues and cutting of expenditure, while tackling the Island’s more than $2 billion debt against a backdrop of widespread unemployment and a punishing recession.

While revenues grew last year, so did spending, and the Island has continued to take flak from overseas — including a barrage of negative stories in the British press earlier this month on Bermuda being used by Google as a shelter for its European profits.

The Bermuda Government’s plan for the impending fiscal year has been anxiously awaited by retailers and restaurant owners hoping for the continuance of payroll tax breaks.

Borrowing will be a topic of particular concern: any additions to the Island’s deficit will elicit staunch criticism when the Progressive Labour Party gives its Reply to the Budget the following week.

John Wight, the Chamber of Commerce’s president, has pointed to deficit and debt as the top perils to the Island’s fragile economic recovery.

Consequently, all eyes will be upon the minister as he makes his way to Parliament shortly before 10am, when the Budget Statement will be read out before MPs. However, today could also provide Mr Richards with a chance to reveal the extent of a much-hoped economic turnaround. Several major infrastructural projects are expected to get under way over the course of this year.

A Budget press conference is to follow at 1.30pm in the Cabinet Office, while the document itself will be available in electronic form via the Government’s website.