Members of the retail industry are to file objections to increases in land tax which they fear could put some of them out of business.

David Hamshere, of the Bermuda Visitor Retail Division of the Chamber of Commerce, told The Royal Gazette that at a meeting on Monday members of the division expressed concern as to whether they would be able to continue to operate given the toll the increased tax will take on their bottom line.

Mr. Hamshere said the matter was of particular concern for the visitor-oriented retailers because of the ailing tourism industry.

Commercial properties have faced, on average, a 34 percent increase in ARV (annual rental value) although the value of some properties has increased as much as 150 percent. Land tax is levied at a straight six percent of that value without any discount.

Most commercial leases state the tenant must pay the land tax and so there is no chance that, as in some residential leases, that the landlord may retain some or all of the increase when the lease is renewed.

Mr. Hamshere said all of the members of the division were concerned about the future of retailing as in many cases the industry was already marginal and the increased land tax just made a bad situation worse.

He added that stores would be forced to reduce the space they occupied and that in essence consumer-friendly large, spacious stores were being penalised.

If consolidating space and inventory did not help to alleviate the financial hardship, employees would have to be laid off and ultimately some stores would have to close, Mr. Hamshere warned.

The retail industry is Bermuda's second largest employer after Government and the vast majority of employees in the industry are Bermudian.

"There is no mechanism for appealing the revaluation of commercial ARVs,'' he said. "An appeal for relief will have to be made directly to the Minister (of Finance) and that is what we are doing.'' Mr. Hamshere said many retailers were bewildered as to why Government had hit them with the tax increase because Government had recognised that the retail industry was in trouble and that tourism had declined in recent years.

He said Government had promised to look at the problems retailers were facing and to do something to help.

Instead Government had landed retailers with an increased tax burden, he said.

Recently, tourist accommodation owners have also voiced grave concerns about their viability in the face of increased land tax.

Nicky Lewin, owner of Astwood Cove, accused Government of reneging on their promise to review taxation with a view to providing incentives for guest properties.

Mr. Lewin faces a 116 percent increase in his land tax bill whilst Andrea Flood faces an increase of 120 percent after the revaluation of her property, Sky Top Cottages.

Such operators will find it difficult to pass on the increase to customers as Bermuda is already considered very expensive by tourists.

One retailer said that if businesses could not find a way to cut overall costs: "Doors will close and employees will be out of work.''