Today’s Budget also knocks a big hole in national debt and reveals the windfall from Corporate Income tax will be bigger than expected
Tax breaks for all working Bermudians, a health care boost for pensioners and a big hole knocked in national debt.
Some of the key pledges and announcements made in today’s Budget Statement by Premier and Finance Minister David Burt.
Capital spending on housing will increase by 43 per cent and all Bermuda residents will be entitled to benefits under Universal Health Coverage by October this year.
Government will repay $605 million in debt by January 2027 – reducing gross debt to $2.69 billion.
Starting out by providing global context, Premier Burt said economies across the world are projected to slow over the next year, underscoring the need for stable fiscal management in the light of U.S. trade policies and other uncertainties.
Bermuda’s GDP is expected to hover between 2.5% to 3% thanks to solid international business growth and recovery in the tourism sector. In total, there were 5,112 people employed in the sector with 72 new jobs added.
Meanwhile, the unemployment rate in Bermuda has dropped among Bermudians from 3.3% to 1.3%, driven by job growth in the international business and hospitality sectors.
Total government revenues of $1.27 billion have created a $29 million surplus.
Going forward, total revenues are expected to top $2.03 billion this fiscal year.
There will be no new tax increases for workers or businesses and government believes this will fuel spending in the local economy.
Premier Burt said: “For many years, Bermudians have seen economic growth and strong performance in international business but have reasonably asked how that success translates into relief in their own daily lives. That is a fair question, and one that this Budget begins to answer in a more direct way.
“The revenue generated from the Corporate Income Tax allows this Government to focus on two priorities that Bermudians have consistently raised with us: providing meaningful relief from rising costs and strengthening investment in the services and infrastructure that the country relies on.”
Premier Burt says the CIT will deliver almost $100 million more to Bermuda this fiscal year than originally expected.
For the upcoming year, it’s $150 million above first estimates.
Premier Burt said CIT receipts for 2025-2026 are $279-million, and then projected to be 753-million for the 2026-2027 year.
He also promised fiscal discipline when it comes to allocating new CIT revenues:
“This is the first Budget prepared fully in the era of Corporate Income Tax. Naturally, there were those from His Majesty’s Loyal Opposition who predicted that this Government would neglect the debt and by extension, neglect our people.
“They were wrong. Additional revenue does not remove the need for discipline. If anything, it increases the obligation to show value, results, and follow-through.
“Our approach has been guided by a few practical rules: We have avoided automatic, across-the-board increases in recurring spending. New revenue should not create permanent obligations that cannot be sustained if conditions change.”
As for tax reductions across the board, Premier Burt said all employers will have reduced payroll tax rates: In IB from 10.25% to 9.75%; large businesses with remuneration over $1 million from 10% to 9%, and all medium sized businesses by 0.5%. Payroll tax for hotels and restaurants will be reduced from 5% to 4% and for retailers it will be lowered from 6% to 5%, effective April 1. Nursing and rest homes will also have employer payroll tax reduced.
Here’s the breakdown for employees’ payroll tax relief:
- Band 1 (Earnings up to $48,000): Reduced from 0.50% to 0.25%.
- Band 2 (Earnings $48,001 – $96,000): Reduced from 9.25% to 7.75%.
- Band 3 (Earnings $96,001 – $200,000): The marginal rate for this portion of income will move from 10.00% to 10.75%.
- Bands 4 & 5 will remain the same.
We’ll have more Budget coverage, including other key spending priorities and the Opposition’s response, as the day unfolds.
