Legislation for tax credits to direct contributors to Bermuda was fleshed out and passed yesterday in the Senate.

Crystal Caesar, speaking on behalf of the Ministry of Finance, introduced the Tax Credits Act 2025, legislation she described as a “significant step forward” in tax reform.

Ms Caesar said: “This Bill is designed to strengthen Bermuda’s position as a forward-looking jurisdiction by establishing a clear, transparent framework for the provision of targeted tax credits.

“These credits will support key sectors of the economy, encourage investment in Bermuda’s infrastructure and workforce, and promote sustainable economic growth.”

The Tax Credits Act, approved in the House of Assembly last week, was designed to give tax credits to insurance companies that invested in the development of Bermuda’s economy.

David Burt, the Premier, said the investments could include domestic goods and services, as well as charitable contributions.

Ms Caesar told the Upper House: “A substance-based tax credit reduces a corporation’s income tax liability through economic activity in the jurisdiction.

“These credits incentivise efficient utility consumption and support energy or environmental policy goals.”

Ms Caesar reminded the Senate that the legislation was part of “an evolving regime”.

Victoria Cunningham, the Opposition leader in the Senate, said the One Bermuda Alliance supported the Bill, calling it a “major shift in Bermuda’s tax regime”.

However, she added: “I think it’s important that the Government shows a framework that can preserve our competitiveness as a jurisdiction while maintaining that economic requirement for the OECD [Organisation for Economic Co-operation and Development].”

Ms Cunningham, who outlined her charity work, including administrating for Bermuda Scholarships, questioned what impact could come to charities offering full-ride scholarships from companies.

Ms Caesar said there would be no negative impact, adding: “There may very well be the ability to get credits.”

Tawana Tannock, an independent senator, noted an anomaly within the Tax Credit Act that could allow certain companies to benefit over others, and asked how this would be monitored. She also questioned whether factors such as work permits and paid leave would influence how tax credits are implemented.

Ms Caesar said that companies that did not pay the corporate income tax would have to show returns by the end of January to claim credits.

She added that companies would have to comply with the “overarching regime of what a work day looks like”.

Mischa Fubler, a government senator, threw his support behind the Bill and its encouragement of “charitable giving”.

He said that all countries within the OECD provided some form of preferential tax treatment for charitable giving.

Mr Fubler added: “I welcome these provisions within the Bill as they are moving us in a direction that aligns us with some of our competing jurisdictions.

“This money is still going to charitable organisations that are delivering essential services to the people most in need in Bermuda.

“So if some of these companies are not in the scope of having to pay corporate income tax but are electing to give charitable donations, I think that is still a good thing.”

Legislation around reforming Bermuda’s tax system dominated the Senate’s debate.