A change to payroll taxes for taxi operators is being praised by the president of an island organisation.

Difficulties collecting tax from drivers meant only $350,000 of the expected $1.2 million yield was achieved last year.

David Burt, the Premier and Minister of Finance, announced an annual charge of $1,000 will now be implemented, to be paid at the time of registration.

Leo Simmons, president of the Bermuda Taxi Owners Association, said that the move created a “win-win situation” for operators and the Government.

Mr Simmons said that the change meant that registered operators “are going to pay less than what we have been”.

He added: “Now, Government doesn’t have to go around and spend money chasing down delinquent drivers that owe taxes, so that saves the Government money in manpower and time.”

Mr Burt said in his Budget Statement: “To increase the yield from this tax and make it easier to collect, we will amend the payroll tax provisions for taxi operators by implementing an annual charge of $1,000, to be paid at the time of registration.”

The fee will be paid by taxi owners, and then passed on to the operators.

Mr Burt said that under the current system, full-time taxi operators are currently required to pay $2,233 per year in payroll taxes. Part-time operators are required to pay $1,118 annually.

He said of the change: “This fee represents a reduction in payroll taxes to taxi operators of at least 50 per cent.”

Mr Simmons said that for taxi owners, passing on the cost to drivers worked out at “about $80 a month”.

He added: “So when you start breaking it down into days, it’s less than $3 a day.”

Mr Simmons said the tax change was something the organisation had been working on for about three years.

He added: “We started this negotiation under the old government.”

Mr Burt said that while there were more than 550 licensed taxis in Bermuda, there were only 411 active taxi drivers registered with the Office of the Tax Commission.

He added: “Even fewer drivers actually file returns.”

Mr Burt said: “This Government recognises the challenges faced by taxi operators. However, it is important that taxes are collected.”