Service stations also serve as retail outlets and is causing a Government rethink on what classifies as retail.

Service stations also serve as retail outlets and is causing a Government rethink on what classifies as retail.

SUNDAY, OCTOBER 2: Premier Paula Cox said that the new 35 per cent duty on items purchased on overseas trips will not take effect until November 4.

“On the customs duty changes at the airport, given the time required to make system changes, including the changes to bank kiosks at the airport that are used for payment of customs duty, the recently announced changes to the customs duty on goods accompanying residents when they return from overseas trips will have effect from November 4, 2011.”

The Premier has also requested a fresh review of business classifications for the policy initiative for retail businesses and requested estimates of cost in order to have necessary information to consider the possible extension of the temporary payroll tax relief announced on Friday.

Accordingly, once further data is available, a listing of any further categories, if any, that may benefit from the temporary payroll tax concession will be available from the Office of the Tax Commissioner.

Premier Cox said: “Over the last two decades, consumer-oriented businesses have extended the mix of goods and services that they sell to people. Changes over the years mean that old models and definition of what should be classified as ‘retail’ today are less relevant and some further changes are required.

“For example, barber shops and beauty salons now sell hair products and related items to their clients. Are they to be classified as operating in the ‘household and personal services sector’ where historically they have been classified for economic purposes? Or are barber shops and salons also ‘retail’ outlets?

“Similarly, are gas stations that sell food, drinks and other consumer items to be classified in the retail sector or are they in the transport sector?

“In modern economies like Bermuda’s economy, there are many more grey lines between business sectors than there used to be.

“This is a reason to take a fresh look at how economic policy initiatives should apply to different sectors of business activity during difficult economic conditions where financial relief is the policy goal.

“Categories of business activity used to depend upon fairly distinct divisions of economic activity. These divisions of economic activity are no longer as clear and distinct as they once were.

 “As Minister of Finance, I have requested a fresh review of business classifications for this policy initiative for retail businesses. I have asked also for estimates of cost so that I may consider the possible extension of the temporary payroll tax relief.

“Accordingly once further data is available, a listing of any further categories, if any, that may benefit from the temporary payroll tax concession will be available from the Office of the Tax Commissioner.

“Recall that payroll tax was rolled back this year for all businesses at an estimated full-year cost of $50 million to the public treasury. The focus therefore will continue to be on assisting the most vulnerable sectors with ultimate limits set by affordability.

“We always have to consider what is affordable for the country as part of our debt management strategy.

“It is never possible to please all stakeholders when tough choices must be made. However, in order that we do go forward with a benefit for the majority, this Government will make the tough choices for the benefit of all of Bermuda’s people.