
MPs pass tax collection agency legislation
Bermuda's House of Assembly has approved an independent agency which will collect corporate income tax beginning next year.
MPs passed The Corporate Income Tax Agency Act 2024 without many objections, The Royal Gazette reported.
The agency will be responsible for collecting a 15 per cent tax on profits of companies based in Bermuda with more than €750 million (about $808 million) of annual revenue.
Premier David Burt said about 2,000 Bermudian-based multinationals will be impacted by the new tax, which could raise as much as $750 million a year.
The agency will also be responsible for calculating and collecting the tax and providing support to companies that are liable for the tariff.
Burt said the legislation was based on laws creating a similar agency in Canada, adding it had received widespread support from businesses and ratings agencies.
The agency will be governed by a board of directors consisting of a chairman and between six and ten additional directors, who will be appointed by the Minister of Finance.
A chief executive officer shall be responsible for the day-to-day management of the agency.
The Royal Gazette reported that Scott Pearman, the Opposition spokesman on legal affairs, said that the One Bermuda Alliance broadly supported the Bill.
He said: “We in the OBA very much support the idea of an independent corporate income tax agency. To be fair, much of this Bill is very commendable.”
However, he questioned whether board members would have enough independence to fulfil their duties and that they would be deprived of some financial information if it was classed as commercially confidential.
“You don’t want taxpayer names passed about, but the board needs to have access to all information. If not, it’s not fully informed and it cannot perform its duties," he said. “If we’re going to impart faith in the CEO and the minister, it does seem odd that we’re not granting it to the board.”
Pearman hoped the board would likely be made up of “the best and brightest”.
Pearman also expressed concern that firms that failed to comply with agency demands could be jailed.
Officials will have the power to demand financial information from companies that could be penalised with a $100,000 fine and up to two years’ imprisonment if they failed to co-operate.
Pearman said: “Failing to provide information to the Government is not a crime and nor should it ever be.“
Mr Burt replied that the Bermuda Monetary Authority operated under similar rules and that “appropriate sanctions“ were needed to maintain standards and protect the island’s reputation.
However, in an amendment to the Act, Mr Burt revealed that companies would only face prosecution if they failed to comply “without reasonable excuse”.
Burt added: “It’s not ideal that it’s an external body, but it is being established to collect taxes on behalf of the Government of Bermuda.”
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