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. 

    Revenues 2013

  • 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. 

    Expenses 2013

  • Increase of Manpower in Police and Police Complaint Authority 
  • Additional $4.2 million expense in Ministry of Health and 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. 

    Related Articles

    1) Check out Bermuda's Economy to know about the economic status of Bermuda. 
    2) Check out Bermuda News for latest updates on what's happening in the island.