Reduced electricity bills could be in the pipeline if government revenue and expenditure pan out as predicted this year.

The pledge was one of several relief measures promised by David Burt, the Premier and finance minister, during yesterday’s Budget speech.

Mr Burt said that if revenue exceeded estimates and expenditure stayed in line with predictions the surplus cash would be used to fund tax reductions.

He added: “We will return 50 per cent of any additional surplus to the taxpayers of this country.

“This means if the projected deficit for 2021-22 comes in below estimates, 50 per cent of those funds will be used to reduce taxes on fuel imports to reduce the cost of electricity in Bermuda.”

He said: “Reductions in duty for fuel imports will reduce electricity bills and provide a cushion for Bermudian households and businesses against further cost and inflation pressures from increasing energy prices.”

But Mr Burt warned that Russian aggression against Ukraine may cause electricity prices to increase because of a jump in the price of oil.

He added that the annual fee for a car licence would be slashed by ten per cent – expected to save the average motorists around $100 a year.

Mr Burt said: “There is a reason vehicle fees are as high as they are, and that is because, as far back as the 1990s, it was the practice of governments to increase fees for all their services and licences by five per cent every other year.

“That was known as the biennial fee review. The last such review was in 2018. Since that time, this government has halted that practice. And we have not implemented across-the-board fees increases as we are committed to reducing the pressures on Bermuda’s families and businesses.”

Another break will come in the form of payroll tax reductions for anyone who earns less than $96,000 a year.

People who earn $48,000 a year will have their annual payroll tax bill reduced by $240 over 12 months and those on $72,000 will get a $120 reduction.

Mr Burt emphasised there would be no payroll tax increases for people who earn more than $96,000.

He said targeted payroll tax relief for hotels, restaurants, bars and nightclubs, which was introduced at the start of the Covid-19 pandemic, would continue “for at least another six months”.

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Residents still struggling financially will have a third and last chance to dip into their pension funds – another measure introduced in 2020 in the wake of the pandemic.

Mr Burt said: “This voluntary withdrawal for up to $6,000 will be extended a final time to provide an additional avenue for relief for those Bermudians who really need it. ”

Charities that earn the majority of their income from donations will be exempt from land tax, as will registered care homes

The supplementary unemployment benefit programme, which is due to expire at the end of March, will be extended until the end of August, although Mr Burt acknowledged that the number of applications had fallen.

Mr Burt said that a more “progressive” tax system would be implemented through the creation of a new tax reform commission.

He added: “This commission will have the long-term work of appropriately adjusting Bermuda’s local system of taxation, in line with the requirements arising from the new OECD global tax agreements.

“Additionally, this commission will be assigned the task of near-term changes to our system of taxation to ensure that the recommendations for a more progressive system of taxation in Bermuda are implemented swiftly.

“A fairer tax system can help us reduce our cost of living, which in turn will boost economic growth, and that is why it is essential that it be advanced.”

Mr Burt claimed the Progressive Labour Party approach to taxation was in contrast to that of the One Bermuda Alliance.

He said: “We must build a fairer and better Bermuda.

“One of the most important aspects of this is that individuals who have more should pay more, and those who are at the lower end of the economic spectrum must have relief, especially given the high cost of living in Bermuda.

“While the Government has not made major tax system changes for this budget year, relief must be provided to Bermudians who will be challenged over the next year with the increasing cost of living.”