And a special Chamber of Commerce committee examining taxation in Bermuda has also ditched the sales tax idea.

Calls for a replacement for customs duties have grown recently as tourist numbers failed to climb and retailers began to feel the pinch.

In the budget Finance Minister Grant Gibbons announced a series of goods would have duties slashed and that Government would launch a top-level tax review.

Last night Dr. Saul said despite the review a sales tax had already been ruled out.

"Any suggestion of abandoning customs duties and replacing it with a sales tax is unfounded,'' said the Premier.

Dr. Saul said customs duties currently earned Government between $120 million and $130 million a year and a sales tax would have to be placed on services as well as goods to raise the same revenue.

It would also need a major increase in manpower to put into place and would lead to a huge new bureaucracy for its administration.

"We should leave the current tax alone and just make changes to it from time to time. Customs duty is a good revenue earner and is easy to collect,'' said Dr. Saul.

Late last year the Chamber of Commerce put together a committee to study the customs duty-based tax system and the benefits or disadvantages of a tax at the point of sale.

Andrew Sykes, Government's economic advisor, is also on the committee and its work was endorsed by the Finance Minister, Grant Gibbons.

Chamber president David Rowntree said last night that the committee's tax investigation was now "exploring completely different areas''.

However Mr. Rowntree and committee chairman Bruce Pottle both declined to say what alternatives they were now exploring.

"We have moved away from the sales tax idea. We have proved that it would not work and we have moved into something different,'' added Mr. Rowntree.

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