The trickle-down effect of payroll tax increases will hit every business in Bermuda.
That's the verdict of restaurant owner Phil Barnett, who joined the chorus of condemnation of Finance Minister Paula Cox's controversial Budget.
The restaurant trade is exempt from the increase. But Mr Barnett, whose venues include Pickled Onion and Hog Penny, said any move that was bad for international business was bad for Bermuda.
"I can't think of a single issue that has caused so many people from the [executive] offices right down to the average worker to be so concerned.
"International business is the engine that drives this economy. We are service providers to international business and we are deeply, deeply reliant on that sector. When they are so obviously, both publically and privately opposed to this out of the blue increase, we have to be concerned as well."
The Bermuda Employers' Council yesterday added its name to the growing number of business organizations to publically speak out against tax increases.
In a hard-hitting statement, executive director Martin Law criticized Government for failing to control its own spiralling costs while saddling the private sector with new taxes that would drive the economy into a "self defeating downward spiral".
"Cost overruns on capital projects, government travel costs, the cost of external consultants and the constant addition of public sector jobs are all areas where direct action by government could have reduced the need to raise taxes.
"They appear to have received scant consideration. Where the rest of Bermuda's employers are having to do more with less, government seems determined not to follow suit."
The Association of Bermuda International Companies and the Association of Bermuda Insurers and Reinsurers have already come out strongly against the tax hike, warning that it could have an impact on jobs.
ABIC, in particular, was heavily critical of a "lack of resolve" from Government in cutting back 'unnecessary expense'.
Mr Barnett added: "The alphabet soup groups are up in arms. The only time they speak out like that is when their members are banging down their doors. I have a feeling the effect of this increase has been completely underestimated."
He said many Bermudian businesses were concerned that International Businesses would 'vote with their feet' and leave.
Mr Law suggested said this was already happening: "We should be doing everything we can to encourage IB to stay and to come to Bermuda rather than compounding the already high cost of doing business here," he added.
He said every local business relied on International Business and would suffer from the knock-on effect. The Foreign Currency Purchase tax increase will also heap further hardship on local businesses.
"Bermuda produces very little by way of commodities, everything has to be imported and paid for in foreign currency. So whether it is fuel oil for power generation, food for the supermarkets, clothing for retailers, building supplies for construction - it will now cost more."
Local business owners across Bermuda agreed the tax increases would hit them in the pocket.
Zach Moniz, manager of Lindo's Supermarkets which employs around 250 people, said it would make life harder for him: "It's not going to make or break us but it will make business more expensive. It is another added cost and I am not happy about any added expense but it is a fact of life. We have to keep our head down and keep ploughing on."
We sought comment from Paula Cox but received no reply.
Posted: Wednesday, March 17, 2010
Comment by:
Born Bermudian
Think this has ruffled just about every ones feathers [...] they DON'T give a second thought to those people that are working 2 jobs, or more and are still NOT making ends meet,They Have forgotten the HUNGRY AND THE HOMELESS, The Premier is so busy overseas, and spending (OUR MONEY) but yet VISITORS RATES are still way down, I am not able to figure that one out yet? I am ashamed to be a BERMUDIAN
Posted: Monday, March 15, 2010
Comment by:
Marlene Gregory
The Finance Minister of Canada has just announced today that Canada will begin to establish the lowest corporate tax rate in ALL the G7...Companies may find this location ideal, with Canada's educated workforce and lower cost of operation.
Posted: Sunday, March 14, 2010
Comment by:
Susan Knight
When I first visited Bermuda in 2006 my boyfriend who was working there at the time warned me of the crime rate and several downfalls of Bermuda. Now, looking at increased taxes I am thinking twice about returning for a surprise vacation with my boyfriend. Crime rate plus higher taxes equals a not so pleasant vacation.
Posted: Friday, March 12, 2010
Comment by:
Robin Hamill
Thank goodness IB is starting to speak up about these critical issues. It's about time they did. I am hopeful Governement and my fellow Bermudians listen and do not discount IB's concerns. If I hear one more person say "IB will never leave Bermuda because of the big buildings they have built", I will vomit.
