New measure to validate Tax Reform Commission
New life is being breathed into a body formed to broaden Bermuda’s tax base and make the system fairer.
Its purpose was to examine the tax system and determine what could be done to ensure it is equitable, effective, efficient, competitive and transparent.
The Government was seeking an increase in public sector revenue yield from 17 per cent of gross domestic product to a minimum of 20 per cent or 22 per cent.
The last report of the Tax Reform Commission was delivered to Parliament in November 2018.
On Friday, a new Bill had to be taken to Parliament by David Burt, the Premier and Minister of Finance, to retroactively dissolve the original commission, and make legal a new one that has already been operating since being empanelled on November 10.
Once enacted, the new measure will mean that the Tax Reform Commission appointed in 2018 shall be deemed to have been dissolved that year, upon the delivery of its final report and recommendations to lawmakers.
The Bill notes that last November, a new “body which was purportedly empanelled by the Minister of Finance” as the new Tax Reform Commission, exercised or performed official functions, duties or operations which then retroactively “shall be deemed to have been validly exercised or performed”.
The new review is to seek assurances that Bermuda’s tax system is in line with the requirements of the Global Minimum Tax/Corporate Income Tax that comes into effect in January.
Mr Burt has also asked the new commission to examine what other tax changes are needed to ensure Bermuda’s economy remains competitive.
He said in March that terms of reference had been agreed with the new commission’s chairman, Darren Johnston, including its mandate, principles and a “realistic, deliverable deadline” of the end of October.
He said the commission would review the work of the International Tax Working Group and consider and recommend a set of policy options, with the aim of causing the Bermuda tax system:
• To share the payments and benefits fairly and equitably
• To maintain, and if possible, enhance Bermuda’s global competitiveness
• To broaden the tax base, reduce the variability of payments and consider alternate forms of taxes
• To reduce the impact of taxes on the cost of living in Bermuda and to consider how earners below a threshold of income might benefit from reduced taxes
• To consider how the Government’s revenue management can be improved including appropriate guardrails and approaches to fiscal optimisation
Chairman: Darren Johnston — previously the CEO of Price Waterhouse Cooper Limited — Caribbean Region and is presently the chief operating officer of Orbis Investments, and a director of Orbis Holdings Limited and other subsidiaries.
Albert Benchimol — the International Business representative, who is the former president and CEO of Axis Capital Ltd and presently serves as a strategic adviser
Brian Holdipp — the Progressive Labour Party representative and who is corporate and finance counsel at MJM
Douglas DeCouto — the One Bermuda Alliance representative and shadow finance minister
Chris Furbert — the Bermuda Trade Union Congress representative, who is the president of the Bermuda Industrial Union,
Jonathan Howes — representing the Bermuda Chamber of Commerce, who is the chief executive of Bermuda Press Ltd
Claudette Fleming — a former executive director at Age Concern
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