Tax break ‘sends right message to developers’

Plans to give tax breaks to boost major development projects in Bermuda have been welcomed by construction firms.

Charles Dunstan, president of the Construction Association, said the concessions could help breathe new life into the industry.

The move to bring about tax reliefs was announced by Finance Minister Bob Richards earlier this month.

And although the exact details have not been ironed out yet, Mr Richards said that the new measures would be similar to the recently introduced Bermudian hire payroll relief.

Mr Dunstan said: “Any moves that help the industry to lower costs is a positive indication to developers that Bermuda is serious about development investment.

“Discussions about how this will work are ongoing, but concessions such as these in the short term will hopefully help to create revenue streams for our economy well into the future.”

Cost savings

He added: “The hope is that, however this initiative is structured, it allows a cheaper construction cost to the end client.

“That is the ‘home run’ – to deliver an incentive to either overseas or local developers, who may be sitting on the fence at the moment, to move ahead with their plans.

“The construction industry and Bermuda needs more than just these measures to show we are on the rebound.

“And they will not necessarily mean that construction companies will reap large rewards.

“This is for developers to find savings that get the construction industry busy.

“The construction company’s rewards will be in form of planning more work and employing more people.”

The local construction industry has been particularly hard hit by the economic contraction of the last five years.

At least 1,200 jobs have been lost in the industry.
However planning applications in the first six months of the year have increased between 2013 and 2014, which Government has claimed is a sign of an upturn in the industry.

Earlier this month Mr Richards said: “What we are proposing is similar to the new Bermudian hire payroll tax relief initiative that was introduced in the 2013/14 Budget. 

“Initially this relief will be targeted towards the construction of specific projects of national importance that have been approved by the Economic Development Committee.”