Opposition Leader Grant Gibbons says Government is essentially asking Bermuda's people to act as a financier because of its failure to pursue debts owed by delinquent taxpayers.

Finance Minister Paula Cox and Attorney General Larry Mussenden announced last week that they were stepping up efforts ? especially on the legal front ? to go after delinquent taxpayers, with receivables now hitting the $37 million mark.

Dr. Gibbons, chairman of the bipartisan Public Accounts Committee (PAC), said he was "gratified" that a tough stance had been taken but chided Government for taking as long as it had to take matters seriously, with concerns dating back at least five years.

He said Government's cash flow issues were likely the wake-up call leading to Government's actions.

Dr. Gibbons said: "This is clearly an issue the PAC and Auditor General have been pursuing aggressively." The debt at the end of 2004 was higher than just one year before, when the debt stood at $31 million. And from 2000, the receivables debt has increased by more than $12 million from about $24.8 million.

Although praising Government for the vigour it now vows to use on recovering the millions of dollars owed, Dr. Gibbons said he was concerned that those who do pay their taxes had been left holding the bag for the delinquents. "I think it is a priority now because Government needs the money." While Dr. Gibbons pointed out that social insurance directly impacts employees ? who may be left high and dry without funds in their old age if contributions are not turned in ? Government itself feels the pinch when payroll tax and land tax receipts were not paid.

He said in recent years a shortfall in expected revenues being received had led to Government cutting social programmes. He said examples of this were the Salvation Army's grant being cut in half, and in December, the doubling of rents for senior citizens who are tenants of the Bermuda Housing Trust.

"The lack of follow through on delinquents has resulted in failure on social issues," he said. He continued that constituent pressure might also have prompted the shift.

"People who pay their taxes need to feel that people who don't will be pursued. It is simply a matter of fairness." He charged Government with "essentially giving delinquent taxpayers a loan. They are acting like a bank financing a loan to these people (who owe)." Government has said it will increase its pursuit of delinquent debts, including through the courts, garnishing amounts due to companies with Government contracts and even setting up informal information-seeking discussions with the Island's banks.

Ms Cox said last week the employers' portion of that debt was a whopping $26.8 million, broken down as some $10 million in pension contributions owing and $16.8 million in overdue payroll tax remittances by 90 days or more. To enable the aggressive pursuit of delinquent taxpayers, Government has authorised the set up of a Debt Enforcement Unit (DEU) to "assist in pursuing the recovery of a considerable amount of ....uncollected taxes." This is the type of help, Dr. Gibbons said, the parties that were responsible for taxes owed to Government ? now the Tax Commissioner and Director of Social Insurance ? have been seeking for years.

The PAC, in issuing its latest report last July dealing with financial years 1999 through 2002, aired concerns on lack of cooperation from the Attorney General's Chambers in recovering the growing tax debt.

It is a matter that has also been separately addressed in the last five years in the Auditor General's annual reports.

In his 2002 report, Auditor General Larry Dennis chided Government for failing to give the Tax Commissioner's office the teeth to successfully do its job. "This office is the Government's largest revenue collector...and holds the largest receivables portfolio. Yet its issues do not seem to receive prominence or priority on a timely basis."

"Of the 33 payroll tax accounts forwarded for civil action to the Attorney General's Chambers in 2002, only two were acted upon," the report revealed.

And the PAC's report in July said: "Your committee continues to have serious concerns about the lack of meaningful assistance provided by the Attorney General's Chambers to the Tax Commissioner and the Department of Social Insurance in following up on debt collection cases." Although recommendations were made to the AG's Chambers on how to address the outstanding debts in 1999, the then AG expressed reservations on being actively involved in debt collection prosecution, and raised concerns on the "public image of Government lawyers being actively involved in such cases."