A milestone in Bermuda’s tax history was passed in the House of Assembly last night when legislation was approved for the taxation of the income of some companies.

The Corporate Income Tax Act is scheduled to take effect in 2025 and will charge 15 per cent on the profits of multinational enterprises with more than €750 million (about $808 million) of revenue annually.

The Bill received guarded support from the opposition One Bermuda Alliance, and was fully endorsed by Curtis Dickinson, the former Minister of Finance, who resigned last year after a row with Mr Burt over the Fairmont Southampton development project.

An amendment was proposed by the OBA that would funnel new revenues towards paying off the national debt.

Mr Burt described that amendment as a stunt and an insult, and “an affront” to the Tax Working Group, the Tax Reform Commission and the House of Assembly.

“There will be plenty of time to debate what to do with the revenue — today is not the day,” the Premier told MPs.

After a five-hour debate, Dennis Lister, the Speaker of the House, ruled that the proposed amendment was in breach of House rules.

Mr Lister pointed out that because the Bill was a money Bill that affected government revenue, only government ministers could put forward amendments.

Kicking off the debate, the Premier noted the country’s takings stood to vary, compared with the stable intake from payroll tax, which at present is the main source of government revenue.

Mr Burt said that much work remained on “defining the guidelines and guardrails in relation to the way the funds should be administered and managed” for tax revenues that were still to be forecast by the Tax Reform Commission.

He attacked the “unchecked arrogance” of the “three musketeers” within the OBA who, he said, felt that they could set the policy direction for the country on the new legislation.

Mr Burt accused Jarion Richardson, the Leader of the Opposition, of pandering to the OBA’s base with an amendment that the Government would not accept — calling it “a dog whistle” that implied that the Progressive Labour Party lacked the expertise to handle the island’s finances.

Earlier, Mr Burt told the House that Bermuda had signed up for the minimum tax agreement in 2021.

Analysts had concluded that the island could not afford to “do nothing”, he said, as the large companies would be obliged to pay a global tax.

He pointed out that the Bill was only laying the groundwork for “historic” reform and that further amendments will be brought to the House in the coming months.

He said: “Today is not the beginning of the end, it is the end of the beginning, and there is still significant work that needs to be done.”

The Premier emphasised repeatedly that many global companies with offices on island will have to pay the minimum tax rate somewhere, and it was therefore preferable if it was Bermuda that collected the receipts.

Scott Pearman put forward the Opposition’s position on the Bill.

Mr Pearman, the Shadow Minister of Legal Affairs, noted that once new taxes are introduced, they invariably stay.

He also said that the OBA was generally opposed to high taxation because “we believe people are better able to manage their own money than governments are”.

He questioned Mr Burt’s claim that companies will have to pay the tax somewhere, wherever they are based.

He said: “It’s not happening everywhere — it doesn’t happen in the US and it shouldn’t be thought that this is the globe marching in lockstep.

“There is an absence of certainty and clarity, and the terrain may change beneath our feet, and so if we are going to go down this path, we must tread carefully.

“We are on the first step of a complicated issue. Anyone who tells you how this is going to turn out is not being straight.”

Mr Pearman said that the new tax could boost government coffers, but warned that that was not guaranteed.

He said: “The phrase we’re going to be hearing is ‘is 15 per cent the new zero?’ Because if everyone has 15 per cent then it is the new zero and then one can understand the merit of going down this path.

“There is potential, but this potential is highly speculative. We are going to need time to know if we’re on the right path.

“But all Bermudians should hope that this will work because our financial lifeblood may depend on it.”

Mr Dickinson, who was the Minister of Finance when the Organisation for Economic Co-operation and Development first mooted the idea of a minimum global tax, said that the Government’s decision to move on the issue now was “the right thing to do”.

He said: “If we allow the unknown to dissuade us from doing things, most of us wouldn’t leave our homes every day.

“We could put our heads in the sand and make believe that the world is not evolving, but we have worked hard to be innovate and remain relevant.”

Mr Dickinson said that one reason why the Bill should be “embraced” was that the island would likely lose its negative moniker as a tax haven.

He said that the Bill only provided the foundations for tax reform, adding: “Next year we need to build the walls, and I have confidence in the team that has been assembled. The people we have hired would tell us if they didn’t think it possible that we can get this done.”

Mr Dickinson also expressed some sympathy with the OBA’s call for any surplus revenue to be ring-fenced for clearing the national debt, but said that it was not necessary to make a decision on that question until next year.

He concluded: “This will put us in a better place and will change the way we do things. But change doesn’t have to be bad. Every time someone has thrown a hurdle in our way, we have navigated it.”

Jason Hayward, the economy and labour minister, queried whether the Opposition had raised the amendment with the tax group working on the legislation, and what the group’s opinion had been.

Wrapping up the debate before the Bill went to committee, Mr Burt accused Mr Pearman of putting forward strawman arguments.

He said: “When you need to resort to strawman arguments, you do not have an argument to make.

“We went to the experts, the people who do this day in and day out and they said that faced with what you are faced with, this is the recommended way forward. That was them, not us.

“How does he know more than the international tax experts assembled to advise the Government on this? It is disappointing that the Opposition believes that they know better.

“The truth is, we don’t know what the future will hold, which is why we’re doing the modelling.

“But what we do know is that international business has agreed that it accepts the Government’s position. It is important that we remember that these provisions that we set out are not just coming from the Progressive Labour Party government, they are coming from industry.”