leaders and fury from the Bermuda Industrial Union.

The Chamber of Commerce believed the tax -- under which employees will have an extra 50 cents deducted from every $100 earned -- would push up the costs of doing business.

And BIU president Mr. Ottiwell Simmons said it would hit the working man hard, while easing the burden on employers.

"It is robbing the workers and paying the rich.'' The Payroll Tax is being formed by combining the Hospital Levy and Employment Tax.

Finance Minister the Hon. David Saul said the streamlined tax would come into force on April 1.

The combined standard rate of tax payable by an employer would go up from 11 to 11.5 percent.

Of this, the maximum amount the employer can force employees to contribute is four percent. Previously it was 3.5 percent.

Dr. Saul told The Royal Gazette this amounted to a rise of 50 cents for every $100 earned, or $200 a year for employees on $40,000 salaries.

He added this was the "man in the street's'' contribution to paying for the return of the Base lands and the Airport.

The Budget highlighted areas exempted from the tax such as employers' contributions to social insurance, the Hospital Insurance Plan, approved retirement plans, hospital/health schemes, life insurance schemes and workmen's compensation schemes.

Furthermore, compulsory tips in hotels would remain untaxed.

Employers currently enjoying benefits under Employment Tax such as sports clubs would continue to enjoy special rates under the new scheme.

"However, these rates will be subject to regular review and changes made with the anticipation that some anomalies will be gradually eliminated,'' he said.

He added self-employed persons would be treated as at present.

Dr. Saul said the new single payroll tax would be more easily understood than the two taxes currently charged on employers.

Therefore, it should relieve much of the administrative burden on employers, both large and small.

It is estimated the measures would raise an additional $7.8 million.

The Chamber of Commerce recognised the need to raise significantly Government revenues, president Mr. Robert Rego said.

And he commended Dr. Saul for striving to ensure that this burden was evenly distributed.

"We do, however, have concerns that many aspects of this Budget will increase the costs of doing business'', and that included the 0.5 percent increase on payroll tax.

Mr. Simmons voiced outrage.

He interpreted the new tax as an attempt to shift the burden from employers to employees.

"The people with the least ability to pay will be hurt. This Budget is not only deceptive but unfair.'' Mr. Ottiwell Simmons