Concerns were mounting yesterday regarding a proposal in a US tax bill to repeal a provision which currently allows US citizens living overseas to exclude $80,000 of income and certain housing costs from their US taxable income.

Catherine Sheridan-Moore, a tax partner with KPMG, confirmed that the repeal of section 911 would not only affect US expatriates living in Bermuda, but also Bermudians holding US citizenship.

Bermudians who hold US citizenship could conceivably be facing the choice of renouncing their US citizenship or suffering a significant drop in income.

Ms Sheridan-Moore said that she had received several calls today from Bermudians in this situation following an article in Monday's Royal Gazette.

The chairman of the Association of Bermudian International Companies, David Ezekiel, said that the issue would be discussed at the next ABIC meeting but the organisation had not taken any action relating to the Tax Bill at this stage. Member companies were likely to be taking action on an individual basis.

Acting Minister of Finance, Paula Cox, yesterday stated that Government was closely monitoring the developments surrounding the US Tax Bill, but she played down the importance of the repeal of section 911.

Ms Cox said: "While the so-called 'section 911 exclusion' has been in the spotlight, Government has also noted the on-going efforts in the US Congress to include anti-inversion measures as part of the Tax Bill."

She reiterated that corporate inversions were not a significant proportion of Bermuda's international business and reconfirmed Government's position that the issue was a matter for US authorities to address as Bermuda was not at fault.

She said that Government's concern was to ensure that Bermuda was not singled out in any anti-inversion legislation that was likely to be passed in the United States. To this end, Government had been in discussion with the International Business Community and in continuous contact with its consultants in Washington.