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Chamber welcomes Budget, but warns of debt burden

The Chamber of Commerce has welcomed Government’s decision not to raise taxes on businesses in the current Budget. (Photograph by Akil Simmons)

The Chamber of Commerce has applauded the Government’s plans for the next financial year — and expressed relief that taxes were not raised in Friday’s Budget.

But in a statement, the chamber warned that the national debt was still “a Damocles’s sword” that threatened to destabilise growth.

The statement welcomed the Government’s “rigorous consultation process”, which would “enable Bermuda businesses to survive and thrive in this economy.

It said: “The chamber recognises the needs of Government and the requirement for funding of key economic strategies to ensure that the Bermuda economy continues to grow and prosper. This Budget recognises the need to not raise taxes on businesses in these economic times.“

The chamber also supported plans for a graduated tax system and said that the Government’s proposals would “fairly distribute the tax burden over the larger employment base without creating undue incentives to manipulate the system”.

Funding for infrastructure upgrades was also commended.

The chamber said: “Our roads, parks and gardens, government buildings and other significant capital assets of the country need to be continually upgraded and renewed in order to meet the needs of a vibrant economy and it is vital the Government continues to provide the necessary funding to ensure the country provides a first-class location for its residents, businesses and tourists.”

Other positive moves, according to the chamber, include the expansion of an economic development zone, some customs duty exemptions and a commitment by the Government to collect outstanding fees.

But the statement added: “While we expect there is much relief in the local business community with respect to the Budget, the island’s large debt burden continues to be the Damocles’s sword that hangs over the economy. Over 12 per cent of revenues are used in servicing the debt and this is not forecast to significantly decrease in the foreseeable future.

“The chamber continues to raise concerns about the levels of unrecorded liabilities — pension fund deficits and Government guarantees — and is relieved to see that Government is recognising this issue with its comments on the pension schemes.

“Working together with our association partners, the chamber believes that the freezing of employer payroll taxes benefits our international business colleagues as well as local businesses who are struggling to make ends meet, especially given the uncertainty around the looming changes of the global tax structure.”

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Published February 20, 2023 at 7:49 am (Updated February 20, 2023 at 8:56 am)

Chamber welcomes Budget, but warns of debt burden

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