A potential cash bonanza that could bring billions of dollars into the economy should be channelled into paying off the national debt, according to the Opposition.

The Corporate Income Tax Bill — which set to be debated in Parliament tomorrow — will charge Bermuda-based businesses with annual revenue exceeding €750 million a tax of 15 per cent on earnings.

The bill is expected to become law at the beginning of 2025.

David Burt, the Premier and Finance Minister, has suggested that the new rate — first put forward by the Organisation for Economic Co-operation and Development in 2021 — will provide Bermuda with an opportunity to “chart a path towards meaningful tax reform”.

Mr Burt added that the fresh revenue stream will filter down to those most in need in the form of tax credits.

But the bill is being challenged by the opposition One Bermuda Alliance, which is calling for excess revenues to be funnelled towards the island’s $3 billion debt.

It is proposing an amendment to the bill.

Douglas De Couto, the OBA spokesman on Economic Development, insisted that the island’s “crumbling infrastructure” also needs support.

The Opposition senator said: “The Premier has spoken often about this proposed tax and the potential benefits to Bermuda.

“However, he has chosen not to provide to the public, or is unable to provide, any numbers around the actual impact of the bill, whether they be upside, downside, or even the costs to administer the CIT.

“The One Bermuda Alliance believes that, while there can be benefits to Bermuda from the CIT, there are also many risks.

“One important risk is that the Government will not handle any possible large revenue from the CIT with the appropriate fiscal responsibility and prudence.

“Indeed, while the problems of our debt and infrastructure have been well-known for a while, this Government has continued to fail to provide a plan to address them.

“Our large debt hamstrings our country in two ways. First, because we have so much debt outstanding — $3.3 billion — we are not able to get materially any more debt to finance key projects and infrastructure.

“Second, because the debt interest payments are so high — $130.4 million — the money used to pay interest cannot be spent on our island’s pressing needs.

“The problems with our infrastructure are well-known to anyone who drives on our roads or has witnessed crumbling retaining walls. These problems are also evidenced by Government’s inability to finish renovating our very own House of Parliament, or properly maintain key national assets like Government House.

“The OBA’s amendment will address how CIT funds can be used to reduce our debt and improve our infrastructure.”

According to the Government, 140 OECD member countries have signed up to the change, which will level the tax playing field globally.

A Government spokeswoman said that the new regulation will allow “for flexibility in balancing international tax compliance with sound economic policy, while maintaining the island’s standing as an attractive mid-shore home for a wide variety of MNEs, including insurance and reinsurance companies, trusts, maritime enterprises and companies in other industries”.

Dr De Couto insisted that that scenario represents only the extreme positive end of a myriad of possible outcomes.

He added that an additional portion of excess revenues from the new tax should be set aside for infrastructure development.

He said: “After that, any excess CIT revenue will be paid into a National Infrastructure Fund, that can be used to fix our roads and other strategic capital infrastructure projects for our island.

“The amendment defines an acceptable level of debt using the Government’s own existing guardrails, specifically being that total debt should be within 80 per cent of revenue, and debt service — interest — costs should be within ten per cent of revenue.”

Last night the Government described the Opposition’s proposed amendment as “disappointing and perplexing”, claiming that it was leaked to the press at the eleventh hour.

A spokesman said that Mr Burt had contacted OBA leader Jarion Richardson urging him to withdraw the proposed amendment.

The unnamed spokesperson said: “Tomorrow’s debate is not a time for political point scoring, but rather a time to applaud Bermuda’s global leadership in international business and the collaboration that has seen Bermuda achieve this milestone.

“Simply put, the Government cannot accept this amendment, as it would go against the collaborative approach that we’ve committed to in designing this new tax regime.

“The legislation has been developed working in close collaboration with industry and other experts in international tax matters.

“It’s absolutely critical to note that this last-minute amendment that was released to the press before it was sent to the Government may jeopardise the countless hours of work that the International Tax Working Group and the Ministry of Finance have expended to get this right.

“The fact that the Opposition would choose a time like this to make a politically motivated attack is shameful. Furthermore, it demonstrates that they cannot grasp the seriousness of this moment for Bermuda and its international business sector.”

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• To see the OBA amendment in full, see Related Media