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Finance Minister Bob Richards defended Bermuda’s low-tax system at RIMS in Denver, Colorado.

Mr Richards was speaking to AM Best TV when he made the comments (video below).



He said: “You always get criticized when you’re ahead of the pack — people are trying to reel you in.”

He said the Bermuda insurance experience was a tax-driven one, “but we’ve evolved so much since then. Bermuda is still a low-tax jurisdiction.

It’s a place where the movement of capital is not infringed upon by the movement of capital”.

He said Bermuda has an employment tax and consumption tax as part of our system but none on capital.

“We have taxes in Bermuda, we just don’t have taxes on capital.

That has allowed us to grow the insurance industry to have a very important concentration of what we call intellectual capital in Bermuda, which has really driven the industry from strength-to-strength over the years, taking advantage of new situations as they arise.”

He pointed out that many places that cry foul over Bermuda’s low-tax system instead offer incentives to lower high taxes.

“Many, many places have tax incentives. What is a tax incentive?

I turn on my TV and I watch US television and I see the state of New York inviting companies to set up in New York and have a 10-year tax holiday.

“They have tax holidays for people who move to the city of London.

Some guy could be making two billion pounds a year. In the UK, who only pays the same tax as a chambermaid.

“Many countries have tax incentives so it’s not unusual in this world.” He added countries and jurisdictions compete on a tax basis and the way they do that is through a variety of measures.

“We’re no different. The only difference that we have is we have never changed our tax system to bring in business to Bermuda.

Our tax system has always been what it is. “We’re a small country.

We didn’t want to have the bureaucratic overhang of an income tax system.

“You know, we’re only 60,000 people. It just doesn’t make sense for us to have that kind of tax system.

“As the finance minister, I’m the guy who is essentially the chief tax guy and we try to collect those taxes as efficiently as possible without much sort of administrative costs.

“That’s the historical basis for our tax system.”

He said using that as a basis, Bermuda has built upon it “to provide a jurisdiction with all the professional services.

From legal to accounting to regulatory — all those things are in Bermuda basically within a square mile in Hamilton. That’s one of the things that make us special in insurance.

“It is a sort of one-stop shop where it’s a place you can have innovation in insurance without having to get yourself bogged down in unnecessary red tape from regulators.

“We have a regulator but the regulator is very aware that a balanced regulatory approach is what increases business in Bermuda, so that’s what we’ve done.”

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