2013 Bermuda Budget Summary
The One Bermuda Alliance (OBA) announced their first National Budget in February 2013. This will come into effect for the 2013/14 financial year (i.e. starting from April 1, 2013). The budget has been based on two major principles ... first is a pro-growth economic policy and second is reduction in wasteful expenses. Here are the highlights of the budget:
Budget Summary 2013
The annual budget deficit has been raised from $243 million to $331 million
Debt ceiling has been raised from $1.45 billion to $2.5 billion
Debt services is expected to cover 15.4% of the total annual revenue
The government is also banking on job growth for additional revenues.
Total revenue for the year is estimated at $871 million which is about 4% less than the previous year's original estimate.
Employers hiring Bermudians for new jobs will get 2 years of Payroll tax holidays
Payroll Tax concession has been extended to Hotel, Restaurant and Retail sectors
License fees for non-Bermudians to buy properties has been reduced from 25% to 8% for the first 18 months after which it would rise to 12.5%. This is a great motivation for outsiders to purchase properties in the island. License fees for condos to be reduced from 10% to 6% for the first 18 months after which it will rise to 8%.
Sin taxes (applicable for items such as alcohol, tobacco etc) will be increased to earn an additional revenue of $2 million
Land taxes to be increased for lands with ARV (Annual Rental Value) above $90,000.
Vehicle license fees to be increased by 3%. The earlier exemption to seniors for vehicles of E-H classes would be revoked (but lower classes to remain).
Corporate Service Tax rate would be increased from 4% to 6%. This is expected to generate an additional revenue of $1.5 million.
Cost of Bus/Ferry passes to increase and generate an additional revenue of $0.5 million.
Aggressive overdue tax collection will be done
Customs duties to reduce by $25 million (about 12.5% compared to previous year)
Government promises faster processing of work permits, company formations etc
A separate committee to be appointed to help building hotels and resorts in the island.
Increase of Manpower in Police and Police Complaint Authority
Additional $4.2 million expense in Ministry of Health & Seniors
Payable interest from debt is expected to increase to $96.7 million from earlier $85 million
Salaries and benefits is expected to increase by $33 million (about 7%)
More money would be spent on students with special needs.
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