Struggling bars and restaurants will be able to apply for payroll tax relief, the Minister of Finance announced yesterday.
Curtis Dickinson said that for the quarter scheduled to end tomorrow, payroll tax would be rated zero for the employer and employee portions of tax for qualified restaurants and bars.
Mr Dickinson said: “The restaurant and bar sectors have been hit hard by the significant decline in sales volume and job losses as a result of the Covid-19 pandemic
“As part of the Government’s emergency measures to assist businesses, we instituted short-term relief from payroll tax to assist this sector.
“We recognise that the fiscal implications of these actions will be a reduction of government revenue, however, we anticipate that this relief will ease some of the pressure on restaurants and bars, and especially lessen the pain being experienced by many Bermudians who work in this sector.”
Employers must stop deduction of the tax from employees’ salaries and, if deductions have already been made, refund the employee under the emergency relief rules.
A ministry spokesman said businesses must stick to several conditions to be eligible for the tax break.
• Taxpayers in arrears must make payment arrangements before submittig an application
• Employers are required to complete and submit returns to www.etax.gov.bm by July 15. A minimum payment of $1 must be made to take advantage of online submission. Returns must reflect the total remuneration paid in the quarter
• Taxpayers must submit the employee portion calculator for the April-June 2020 tax period to firstname.lastname@example.org to reflect the remuneration paid
• Late returns will incur a 5 per cent penalty. Returns submitted later than two weeks past the deadline will not be eligible for the concession
• Any form of profit sharing paid in this period will be subject to payroll tax. This includes payments such as bonuses and dividends
The spokesman said all declarations were subject to audit by the Office of the Tax Commissioner and penalties for non-compliance will be based on the amount of tax due at the standard rate.
He warned non-compliance could also be considered as criminal tax evasion.