The Royal Gazette understands.

Government's Valentine's Day Budget will be no bouquet of roses or box of chocolates, but some Bermudians will think Finance Minister the Hon. David Saul a sweetheart.

Local retailers, for example, will get some relief as they strive to be more competitive with stores on the US Eastern Seaboard.

The reductions in Customs duties that Dr. Saul is expected to announce will mainly affect goods that are sold to visitors -- like bone china and quality clothing.

Relaxation of exchange controls -- already widely reported in the news media -- will be part of the Budget.

But sources said Dr. Saul will touch on many other areas as he tries to trim Government's spending while increasing its revenues.

In general, Dr. Saul will try to continue the moderate course of the last three Budgets. While avoiding measures that would stall the recovery from the recession, the Minister will also avoid actions that would spark inflation, now slumbering at 2.2 percent.

Bermudians can expect: Modest increases in Transport Control Department licence fees; A hike in the tax on cigarettes, now set at $55 per kilogram; An increased tax on alcohol; Announcement of a simplified and more "user friendly'' Customs Tariff Act 1970, combined with some relief in duties paid by local merchants.

The multitude of different Customs duties are to be replaced with a much smaller number of "bands'' of Customs rates; Extension of the Hotel Refurbishment (Temporary Customs Duty Relief) Act 1990 from its scheduled November 30 date of expiry. The Act gives hotels five percent duty relief on materials purchased for refurbishments.

A general upward adjustment of Government fees.

Relaxation of exchange controls is expected to include abolition of the ten percent overseas investment tax and increasing the annual limit on overseas investments to $100,000 or $50,000 from $25,000.

Lifting of interest rate ceilings is also expected.

The Airport departure tax, hotel occupancy tax, and cruise ship passenger tax are not expected to be touched, as Government hopes for Bermuda's tourism recovery to continue.