A new debt enforcement unit created by Government has recovered $500,000 in overdue taxes in just six weeks, according to Government Senate Leader Larry Mussenden.

Speaking in the Senate yesterday, Sen. Mussenden ? who is also Attorney General ? said Government had "the political will" to recover outstanding debts, after persisting concerns over the level of accounts receivable were raised by Opposition Senator E.T. (Bob) Richards.

Sen. Richards charged that Government's financial statement showed that debts had increased by $15 million last year alone.

The financial statements of Government's consolidated fund up to March 31, 2004, showed that the Office of the Tax Commissioner was owed $102.4 million ? a $15 million increase since March 2003 when uncollected fees stood at $87.5 million.

"This area is clearly a problem within the accountant general's department," Sen. Richards said. Referring to previous reports on the matter from Auditor General Larry Dennis, he said the problem "must represent a lack of political will to deal with".

Government set up the Debt Enforcement Unit (DEU) within the Attorney General's Chambers earlier this year with the task of pursuing recovery of uncollected social insurance contributions and payroll tax.

Sen. Mussenden agreed the debt owing was "at a very high level" but that six weeks of hard work had led to the recovery of "about $500,000 paid into Government coffers".

While this was a start, he said it was now a case of the "rubber hitting the road". He warned companies that if they have not made good on Government remittances, legal action could be taken, and wind-downs could result.

"It is not tolerated to use [employee contributions for business purposes ? that is criminal," Sen Mussenden said.

"Those doing this kind of practice should fear the Debt Enforcement Unit ? fear it like the IRS in the US."

Although he said he would like to name names, he couldn't go that far but an eye on the Supreme Courts writs would be telling.

"You will see the writs as they come flying through the courts of Bermuda," he said.

However, Sen. Richards pointed to comments made by Opposition leader Grant Gibbons in his response to the Budget reply last week, on how Government had, for several years running, underestimated the revenues that taxes would bring in.

In the 2002/2003 Budget, actual tax revenues were said to have exceeded the original forecast by $62 million. In 2003/04, final revenues exceeded the original forecast by $55 million. And in this Budget, revised revenue estimates for 2004/05 from Finance Minister Paula Cox are set to exceed the original forecast by over $44 million, a number that could move higher as the fiscal year is not yet finished.

In total it adds up to $161 million more in tax revenues than expected. Sen. Richards said the difference was a "big difference" and that Government seemed to have a "systemic problem" on its ability to calculate tax revenue estimates.

"What we have is a high tax rate and people can't pay. You are always going to have people who won't pay taxes... the system is heavy on the top; people are not able to pay and Government is not able to collect," he said.

But Government Senator Raymond Tannock, who led yesterday's Finance Ministry debate, said payroll tax revenue had exceeded estimates because much work had to be done after Hurricane Fabian's devastating hit on the Island in September, 2003. Storm damage led to a boom in the construction sector as well as demand on building supply firms.