Senator clarifies that fee increases will raise $3.3m not $21m
The junior finance minister apologised yesterday after she mistakenly magnified the volume of revenues expected to be generated by a hike in government fees.
Arianna Hodgson clarified that increases to certain charges will result in $3.3 million of additional funds, not the $21 million she told senators would be raised during her remarks on Wednesday.
She said then that while in the past the fees were reviewed and increased by five per cent in most cases every two years, no increases had been made since 2018.
Ms Hodgson said on Wednesday: “The Government has taken the decision to increase selected fees in support of the Government’s necessary infrastructure investments.
“The Government will only be increasing the following fees by 5 per cent – stamp duty, trademarks, solid waste, immigration and planning in 2023.
“The estimated revenue from these fee increases is an additional $21 million in revenue. All other government fees will remain at their 2018 rates.”
There will also be an increase in charges for customs clearance for private jets on public holidays and for supervision of passenger ships with more than 20 people on board.
Those applying for Bermudian status, permission to live in Bermuda and those seeking British naturalisation will also be subject to increased fees.
Building permit fees will be updated to “streamline” the system, including a $50 penalty charge for building permits that have to be resubmitted.
Some fees will also be cut including permit applications for new senior care homes, food production centres and commercial renewable energy systems.
Demolition and excavation projects on residential properties will see fee reductions.
Douglas De Couto, the Shadow Minister of Economic Development and OBA spokesman for tourism, highlighted that these fees, in many cases, were going to impact people’s spending power and increases the cost of doing business.
Dr De Couto said: “While we appreciate that the Government needs to find money where it can and has taken many actions it is claiming as tax cuts, these fees, while not technically taxes, are in many cases going to flow through to the wallets of Bermudians.
“I have also heard that people are already seeing messages from people that they trade with. The services that they buy reflect that these increased fees are also increasing the cost of doing business for many Bermudians.
“I would like people to recognise the impact that it does have on everybody in Bermuda.”
Under the Government Fees (Trade Marks and Service Marks) Amendment Regulations 2023, fees for approving and renewing trademarks and service marks will increase by 5 per cent. The amendments were passed without objection or questions from senators.
Stamp duty rates will increase by 5 per cent under the Stamp Duties Amendment Act 2023, which was approved by senators. However, first-time homeowners and those transferring mortgages have been given a break through some fee adjustments.
First-time buyers will be exempt when purchasing any property valued under $1 million.
The Progressive Labour Party has said previously that the amendments would encourage competition among banks by allowing homeowners to transfer their mortgages to another lending institution offering them a lower rate, without having to incur extra fees.
In a statement released yesterday, Ms Hodgson said “select government fees” would be subject to a 5 per cent increase, including stamp duty, trade and service mark fees, company licences, solid waste dumping fees, immigration fees, planning fees and seaborne shipping fees.
She added: “These increases will result in $3.3 million in additional funds, not $21 million as stated.”
Ms Hodgson said: “The $3.3 million gained from the 5 per cent increase to select fees pales in comparison to the tax reductions in this budget for those in the lowest payroll tax bands, which amounts to at least $13.4 million of savings for taxpayers, and the reduced tax burden on 86 per cent of local businesses, which amounts to $6.7 million less paid in taxes.
“This government has demonstrated its commitment to reduce the burden of taxation for Bermuda's workers and local businesses.
“The $21 million figure for the expected additional revenue from the selected fee increases, shared in the Senate, was incorrect, and I apologise for any confusion caused.”
• UPDATE: this story has been updated to include the junior minister’s clarification and apology
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