Tax Hikes In Bermuda's Latest Budget
by Mike Godfrey, Lowtax.net, Washington
23 February, 2015
Bermuda has published its 2015/2016 Budget, which includes proposals for a number of tax increases to balance the territory's books.
The Budget notes that Bermuda's tax base is narrow compared with other international financial centers, with its tax burden amounting to just 19 percent of gross domestic product (GDP). Presently, the territory is heavily dependent on revenues from the financial services and tourism sectors.
As well as proposing a number of tax hikes, Bermuda is seeking technical assistance from the International Monetary Fund's Caribbean Regional Technical Assistance Center to study measures that would broaden Bermuda's tax base, with a view to balancing the territory's finances within three years.
The 2015/16 Budget includes the following measures:
- An increase to the payroll tax rate on employers by 0.5 percent to 14.5 percent. Payroll concessions currently in place for the hospitality, restaurant, and retail sectors will be partially rolled back in 2014/15, with businesses in these sectors to pay a rate of 5.5 percent;
- An increase to the payroll tax rate on employees by 0.25 percent to 5.50 percent;
- The duty on fuel will be raised by five cents per liter in April;
- The land tax on commercial properties, which is based on rental values, will be increased from 4.4 percent to 5.5 percent;
- The corporate services tax rate will be raised from six percent to seven percent; and
- The Airport Departure Tax will be raised from USD35 to USD50 per passenger.
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