The Government of Bermuda acknowledges the release of the Fiscal Responsibility Panel’s 2024 Annual Assessment and its position regarding Bermuda’s economic recovery and fiscal trajectory.
The Government welcomes the recognition of its progress toward economic resilience and sound fiscal governance. Within their report, the Fiscal Responsibility Panel recognizes Bermuda’s strong economic performance, prudent fiscal management, and the Government’s continued progress toward achieving a balanced budget.
The Panel noted that Bermuda’s economy has strengthened over the past year, with growth driven by international business, accommodation, and food services, and “some progress made on diversifying the economy.” The Panel also highlighted the Government’s commitment to remaining within its fiscal guardrails and achieving a balanced budget in the current fiscal year.
The Panel noted that – “Bermuda’s inflation rate has tended to be lower than that of its trading partners, despite high costs due to its remote island location, at least in part due to government measures to alleviate cost of living pressures.
“Over recent years duty on staple goods has been eliminated, the sugar tax reduced, fuel prices frozen and vehicle licensing fees reduced. This fiscal year, the standard premium rate of health insurance was frozen for the third successive year; this effectively transfers costs from individuals and households to the government budget.”
The Government acknowledges the Panel’s view on the extraordinary measures taken this year to freeze Government health insurance rates for the third year via the sinking fund.
The Ministry of Finance believes this was an appropriate step to reduce the cost of living pressures while saving families and businesses $540 a year for each insured person. It underscores the Government’s priority to support families and businesses during tough economic times.
The Government remains committed to using improved fiscal performance to ease the cost of living and doing business in Bermuda. As outlined in the Pre-Budget Report, several initiatives will be implemented to provide direct relief to families and businesses, including reductions in Customs Duty, Land Tax, Vehicle Licensing Fees, and telecommunications fees.
These tax cuts reflect the Government’s commitment to reducing the cost of living while maintaining fiscal stability.
The Panel praised the Government’s proactive work to implement a Corporate Income Tax (CIT) to align with global minimum tax requirements, noting the effective engagement with stakeholders. It recommended that CIT revenues be used responsibly, prioritizing debt repayment, investments in capital projects, and building reserves to ensure fiscal sustainability.
The Government’s Pre-Budget report meets the Panel’s recommendation to retire the $605 Million of debt that is due in 2027.
The Government shares the Panel’s view that revenues from the Corporate Income Tax represent a unique opportunity to strengthen Bermuda’s fiscal position while alleviating pressures on the economy.
Premier and Minister of Finance, The Hon. E. David Burt, stated: “The Panel’s report reflects the success of our economic recovery efforts and prudent fiscal management. We remain focused on delivering tangible benefits to the people of Bermuda through continued relief, enhanced infrastructure, and targeted reforms. Through tax cuts, infrastructure investments, and investing in healthcare, we are building a stronger, fairer Bermuda for today and for future generations.”
The Government’s focus on achieving a budget surplus and responsible use of CIT revenues ensures that Bermuda is well-positioned to reduce national debt and safeguard fiscal stability.
The report can be found on www.gov.bm.
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