Bermuda increases taxes to overcome $220 million deficit

Tax increases are on the way at the pump, at the airport and in the paycheque as just three ways the Bermuda Government is seeking more money for the 2015-16 Budget, Bermnews.com reports.

Finance Minister Bob Richards said “in order to reduce the deficit, the Government considers it appropriate now to strengthen the tax base.”

Increases can be expected on Payroll Tax, Land Tax on commercial buildings, Corporate Service Taxes, Customs Duty on fuel, Airport Departure Tax and other fees as part of Government’s strategy to overcome an estimated deficit of $220 million.

Government spending on the America’s Cup is broken down into three areas: $37M on infrastructure and services; $15M in sponsorship and a $25M sponsorship guarantee.

While that total adds to $77M, it does not mean Government will spend that much. He said the “sponsorship guarantee is not money spent by the government, but rather an underwriting of private sponsors. That underwriting will be reduced as additional commercial sponsorships facilitated by Bermuda come on line and by a proportion of admissions revenues earned up until August 2017.

“The claim that the America’s Cup will cost the Bermuda government $77 million is false. That statement assumes that the America’s Cup in Bermuda will be an abysmal failure with no sponsors. That type of thinking only guarantees failure as an outcome.”

The Government expects the America’s Cup to inject $250 million into the economy over the next two years, reports Bermnews.com.