Tax reform is crucial if Bermuda’s cost of living is to come down and the island is to remain competitive, the Premier told a post-Throne Speech press conference yesterday.

“The cost of living has been the biggest political issue in Bermuda for 25 years, that has always been one of the number one concerns.

“We will not make a significant dent in Bermuda’s structure of cost of living without significant tax reform,” David Burt said.

Mr Burt has previously said that revenue from a 15 per cent global minimum tax, which is due to come into effect in 2025, would be used to help reduce local taxes, such as customs duty, and not just increase government revenue.

He said a Tax Reform Commission would “go through the implementation of the tax and make suggestions on the reduction or elimination of existing taxes and customs duties, which makes everything that comes in to Bermuda more expensive”.

“The goal of the commission is to keep Bermuda competitive and economically the way to keep Bermuda competitive is to fix this challenge of the cost of living. That can only happen through significant changes to tax reform. Just about every single tax we have is inflationary.”

Asked if the Government had an idea of how much revenue the tax would create, the Premier said: “We certainly do but that information will be provided to the Tax Reform Commission.

“I am not going to start prognosticating here because we need to make sure that we finalise all the various items before we start talking about what may or may not come.”

He said he would not prejudge the work of the commission on what percentage of the tax would go towards reducing local taxation.

“It has been empanelled to examine all these matters and to make recommendations to the Government. That is the information the Tax Reform Commission will recommend to Government.

“The Government does not view the creation of a global revenue tax as increasing government’s overall revenue. What we want to do is to make sure we offset those with reductions in taxes that increase the cost of living and cost of doing business.”

He said the commission’s recommendations would be made public.

The Premier was asked whether revenue changes when companies affected by the global tax made losses had been taken into account.

“I actually find the question offensive because the thought that the Ministry of Finance does not factor in the view that revenue will change, I actually find offensive,” said Mr Burt.

“It comes from the perspective of the assumption over at Royal Gazette headquarters that the Government doesn’t know what it is doing, can’t manage finances, so of course we have taken that into account, and of course the commission is going to take that into account.

“Yes, that is what we are doing, we are dealing with a massive change of taxes, and in that massive change of taxes, all those factors have been taken into account, so when there are people from the One Bermuda Alliance who sit on the Tax Reform Commission putting out nonsense statements, and The Royal Gazette then parrots the exact same thing they are saying. I actually find it offensive because, of course, we have taken it into account.”

The Royal Gazette was unable to ask follow-up questions on how that would affect planning for future government budgets and levels of local taxation or if some revenue would be held back so that taxes stayed the same.

Bermuda is set to start taxing multinational corporations with more than €750 million of global annual revenue, ending its historic status as a zero-rate jurisdiction, as a plan for a minimum global tax kicks in, led by the Organisation for Economic Co-operation and Development.