The Bermuda Government needs to do a better job of collecting unpaid taxes due before it starts looking for new ways to tax the public.
That is one of the views expressed by the Bermuda Chamber of Commerce, reacting to the release of the independent Caribbean Regional Technical Assistance Centre (Cartac) report on tax reform in Bermuda.
John Wight, president of the Chamber, said the organisation backed progressive tax reform and initiatives that would bring more people to live and work in Bermuda, thus expanding the tax base.
The Cartac report, which was submitted to the previous One Bermuda Alliance administration in 2015, but was made public only last week by the new Progressive Labour Party government, highlighted the scale of taxes in arrears.
A statement from the Chamber’s executive was very supportive of strengthening enforcement of tax collection.
“Before we look at creating new ways to tax our residents, a better job needs to be done to collect existing arrears,” the Chamber said.
“The report states that at the end of the 2014-15 year, arrears totalled $197 million, of which $146 million represented payroll tax alone. More than 90 per cent of this balance is older than 12 months. Collection has to improve.”
The Chamber praised the government’s move in releasing the report, saying it would promote a fact-based discussion on a critical issue.
“Discussion, collaboration, and action around tax reform are critical for Bermuda,” the Chamber stated.
“Tax reform should be viewed alongside Bermuda’s declining birth rate, immigration reform, and other important issues that impact Bermuda’s financial objectives of balancing the country’s budget and repaying its debt. Fiscal responsibility is paramount.”
The Chamber said it supported transparency, fairness and simplicity in tax reform and added that the Cartac report should be just one of many tools that government should be using in making tax policy decisions.
And the business organisation also backs the government’s stated desire, expressed in the Throne Speech, to achieve economic growth by creating new jobs for more people to work and live in Bermuda.
“Progressive taxation, as evidenced by the change in payroll tax rates that came into effect on April 1, 2017, is supported by the Chamber,” the statement added.
“With socioeconomic disparity becoming an increasing problem across the western world, the Chamber believes that a model promoting higher tax rates for those earning higher salaries is fair and equitable.”