Maverick United Bermuda Party MP Trevor Moniz has attacked Government over plans to reduce payroll taxes for international businesses.

Under the proposals international businesses will go back to paying pre-2000 budget amounts, but he said cuts should be made to all companies across the board.

Mr. Moniz, UBP MP for Smith's South and a partner in the law firm Moniz, George & Lavine, said any changes should apply to both local and international sectors to keep the system fair and in line with international standards.

His comments come after David Ezekiel, head of the Chamber of Commerce International Division, revealed last week that the Government was to reduce payroll tax for international companies by millions of dollars in the next budget.

Changes were made last year to the way the tax was collected to even out any differences between international and local companies in response to OECD concerns.

Instead of having the option of reporting an assumed figure of over $70,000 for each employee, international companies would now report actual salaries with a cap of $250,000.

The change was made because of international pressure to make sure that all companies were taxed in the same way, another measure to avoid the label tax haven.

These changes, announced in the 2000 budget, have seen the tax paid by international companies go up by between ten and 100 percent, according to Mr.

Ezekiel.

And Mr. Ezekiel added that the Ministry of Finance has agreed, after discussions with the international community, to take the taxes back to pre-2000 budget amounts.

In his budget statement last year Finance Minister Eugene Cox said that the change in the way the tax was collected was meant to be revenue neutral - ie not to raise the tax. Mr. Cox has so far not commented on the controversy.

Mr. Moniz claimed that going back on the way the taxes are collected flies in the face of sense and international standards.

He added it was not logical to just reduce payroll taxes for international businesses, but that the payroll tax should be reduced by two percent to ten percent for all businesses as a way of making the cuts more fair.

"I am firing a shot across the bow for Finance Minister Eugene Cox,'' said Mr. Moniz. "The changes were made to comply with international standards, to bring international business in line with local business in tax matters. So why change it only for international business? It does not make sense.'' Moniz slams business tax breaks In the most recent statistics issued by the Government, figures showed that the amount of payroll tax collected between July and September 2000 had risen by $6.4 million -- or almost 17 percent for the period -- to $44.7 million.

Mr. Moniz said: "If you lower taxes across the board, you can please the OECD and cut the rate, so everybody gets something out of it.'' "I can find no justification in taxing a Bermudian earning $50 million and paying tax on just $250,000 when another Bermudian is earning $50,000 and paying full tax on that.

"Before, the high-earning person was paying tax on a nominal amount of $70,000. The increase in tax payments to someone earning this amount means nothing. I don't know who is squeaking about it.

"I would like somebody to explain this to me because it makes no sense. I am challenging the Minister (of Finance) to do something about this.

"The whole thing amazes me. A Bermudian working for an exempt company can earn more money but pay less tax. On the other hand ordinary Bermudians are getting hammered on land tax. The Minister might want to even this out.'' It was thought at the time of the last Budget that high salaried employees would be evened out by those earning between $40,000 and $50,000. At the time Mr. Cox said that he expected the amount of tax collected to change little due to a payroll credit of $2,400.

At the time of the Budget there was much confusion about how the changes would affect taxes paid.

Mr. Moniz said: "It was always obvious that there would be an increase in the amount of tax collected if you changed the way the tax was collected like this. It was always going to result in a substantial raise in revenue. There is no way anyone could have thought it was going to be revenue neutral.''