The reintroduction of vehicle licence fees for seniors who own larger cars should be scrapped, Shadow Finance Minister David Burt said today.

Mr Burt said that the OBA Budget decision to end exemptions for some older people who drive bigger vehicles was unfair.

He added: “Our party does not support the move to punish our seniors by reintroducing vehicle licencing fees to some seniors and not others.”

Mr Burt told MPs during his reply to Finance Minister Bob Richards’s Budget of last week that the then-PLP Government rejected the idea last year.

And he contrasted the extra tax burden for seniors with payroll tax breaks for employers and the cutting of land licence fees for Permanent Resident Certificate holders.

Older drivers with cars in classes A-D will be unaffected by the Budget, which also increased vehicle licencing rates by three per cent, but those with vehicles in the E-H classes will have to pay the full amount.

After the measure was introduced in 2007, the number of Class H vehicles registered to seniors rocketed – leading to fears the system was being abused.

Mr Burt said: “We do not believe that burdening our seniors with higher fees while providing tax breaks to companies and PRC holders are the correct priorities for our country.

“The vast majority of the seniors enjoying this benefit are law-abiding citizens who by and large are on fixed incomes.

“The PLP made their lives a little easier with this relief.”

He added: “The size of your car has no bearing on your ability to afford vehicle licencing fees. Many seniors affected by this tax increase do not have SUVs but have station wagons or sedans that are over 10 years old and they will see their cost of living go up.”

Mr Burt said: “We urge the OBA to crack down on the abuse and go after the people flouting the law, but not to punish law-abiding seniors who are challenged to make ends meet.

“It is wrong for the OBA to punish all our seniors for the actions of a few. On behalf of the seniors affected, we urge the OBA to reconsider this tax increase.”

Mr Burt added that the PLP would take a “wait and see” approach to the land licence reductions, which are aimed at boosting the property market and construction sectors.

He said: “We are not certain that this move alone will spur the construction sector – however, we support the intent of the OBA in making this move.

But he questioned the reasoning behind slashing the rate from 25 per cent to eight per cent for 18 months, then imposing a new permanent rate of 12.5 per cent.

Mr Burt said: “Bermuda has limited land to sell, therefore it is puzzling why the rate is not proposed to return to its historic level of 25 per cent.”

He added that, while the PLP supported the two-year payroll tax break for employers who take on new Bermudian staff, it was unlikely to be “revenue neutral.”

Mr Burt said: “Although this exemption is targeted towards new hiring, there is no specification that the new employee needed to be unemployed prior to their hiring in order to qualify for the new tax exemption.

“This means for general turnover inside the economy, such as someone losing a job and getting replaced or someone moving to another job. This plan, as constructed, will lead to lower Government revenues.”