Premier predicts slate of tax breaks in next financial year
The Government is expected to accumulate sufficient funds in the upcoming financial year to deliver a raft of tax breaks worth $45 million, according to the Premier.
Plans to reduce taxes on energy, eliminate customs duty on building supplies, lower private car licensing fees and slash land tax rates were announced by David Burt when he tabled the Pre-Budget Report yesterday in the House of Assembly.
According to the report, government revenue for the 2025-26 financial year will remain steady at about $1.26 billion — even with the proposed tax breaks factored in.
However, an expected $187.5 million injection from the soon-to-be-introduced corporate income tax will enable the Government to increase expenditure by more than $100 million on this financial year — and still be left with a budget surplus of roughly $84 million to be ring-fenced for paying off the island’s debts.
Of the $100 million rise in expenditure, $50 million will be spent on the launch of a universal healthcare system, $30 million will pay for salary increases in the Civil Service, and spending on capital projects will get a $26 million boost.
Outlining key points of the 20-page report, Mr Burt told MPs that he expected 2025 to be “a transformative year”.
He said: “With the first revenue collections from the corporate income tax, we will not only deliver relief, but also make strategic investments to ensure long-term prosperity and set Bermuda on a path to repay its national debt.”
He said that the launch of universal healthcare would improve hospital services and expand access to preventive care and specialist visits.
He justified additional funding on public worker salaries “to keep public sector employment competitive with the private sector”.
The Premier said that extra funding for capital projects would speed up road resurfacing after the installation of the new asphalt plant.
Other capital projects in the pipeline include the replacement of the Swing Bridge, increasing the affordable housing stock, the building of a seniors’ day care centre and a new agricultural service centre.
Mr Burt said that the island faced a $605 million payment on its $3.2 billion debt by January 2027 — with the corporate tax windfall to help fund it.
He said: “The Budget surplus is projected to be $84 million in FY 2025-26. This amount, though much higher than expected, is necessary for the Government to build up reserves in the Sinking Fund to reduce Bermuda’s debt.
“While the Government plans to invest in reducing healthcare costs for residents and businesses while boosting capital spending, we must also ensure that the $605 million of debt due to be paid in 2027 can be repaid in full without the need to refinance that debt at what may be higher interest rates.”
Mr Burt added: “I wish to affirm my sincere expectation that 2025 will be a transformative year in Bermuda.”
He said the first revenue collections from the corporate income tax would help with “strategic investments to ensure long-term prosperity” and “lay the foundation for a stronger, more resilient Bermuda”.
He added: “These measures are designed with fairness at their core. They focus on the areas that touch every Bermudian’s life — energy, housing, transportation and connectivity.
“Each of these initiatives reflects this Government’s understanding of the real challenges faced by our people and our determination to provide meaningful relief to taxpayers.
“This Pre-Budget Report proposes bold initiatives to ease financial pressures, invest in critical infrastructure, and improve access to healthcare, all while maintaining fiscal responsibility.
“It is a plan that will ensure that this Government delivers on its mission of building a fairer Bermuda for all.”
The Pre-Budget Report proposes a stack of tax cuts and fee reductions that the Government believes will reduce the cost of living.
Measures include:
• A 20 per cent reduction in energy tax
• A 10 per cent reduction in private car licensing fees
• A 50 per cent reduction in the monthly tax on mobile phones
• The elimination of customs duty on all building materials to cut the costs of building, renovating and maintaining homes, and boost construction
• The elimination of customs duty on parts used to maintain and repair motor vehicles
• A reduction in the base rate of land tax for all residential properties by 50 per cent, to $150
• A rise in the personal duty-free allowance for returning residents from $200 to $300
Residents were invited to provide feedback on the pre-Budget report at forum.gov.bm or by e-mailing openbudget@gov.bm.
The deadline for submissions is January 17.
• To read the Premier’s statement and the report in full, see Related Media
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