April launch of new tax ‘not possible’
A proposed levy dubbed the general services tax will not come into effect for the next fiscal year starting April 2017, according to Bob Richards, the Minister of Finance.
While he was not prepared to divulge new details on the 5 per cent charge put forward in the 2015 Throne Speech, Mr Richards said an April launch was “not possible as we go through the consultation period”.
“It's a whole new tax, a new concept.
“We are making a lot of progress with payroll tax reform. The general services tax is more difficult and taking more time.”
Consultation on the tax's design and implementation commenced in May.
A stimulus package of new hotels, the America's Cup and the airport terminal redevelopment remains at the heart of the Government's medium term economic plans, concurrent with holding back spending.
“The transformation from ideas to realities is never fast enough for me, or for Bermudians,” Mr Richards said.
“It's frustrating, but these are the frustrations of life.”
Shovels are expected in the ground for the project at LF Wade International Airport, which the minister expected to bring “in excess of 400 jobs for construction and 50 jobs in operations — and not just retail”.
“The overwhelming majority of those jobs will be Bermudian. That's one of the reasons we are doing it.”
Mr Richards defended the public-private partnership model as protecting Bermuda on the dual fronts of construction and financing, whereas the acute care wing at King Edward VII Memorial Hospital, the island's other P3, had only given cover on the latter.
“Our track record as a country for significant capital projects has been really bad, and not restricted to any one government,” he said. “We just cannot afford to underwrite expensive mistakes.”
And Mr Richards told The Royal Gazette that his ministry would be “going back to the market and looking for more money” in as little as a few weeks' time.
“Officials will be physically going to financial markets, the likes of New York, Boston, Los Angeles, London, to promote a new bond issued for the Bermuda Government. We are fortunate that lenders want to loan to us, but that depends on our performance in the conduct of our business. The issue for me is not to try and get money because it is available, but for us to manage ourselves so that it will always be available when we need it. That is why the financing of this airport is key, since it does not negatively affect our ability to raise money in financial markets.”