Premier and Finance Minister David Burt delivers the 2025/2026 Budget Statement
(SCROLL TO END FOR FULL BUDGET STATEMENT)
Introducing today’s 2025/2026 Budget, Premier and Finance Minister David Burt highlighted his Government’s record of managing the economy, efforts to tackle the cost of living, and their steering of Bermuda through the COVID-19 pandemic.
The Premier also talked about external pressures, including impacts on the supply chain. He says navigating the year ahead will require a careful balance.
LOCAL ECONOMY
He says the local economy is estimated to have expanded 4.5-5% in 2024.
There has been growth in tourism and construction, while international business remains the main driver of the economy. For the third consecutive year, there are a record number of Bermudians employed in international business, the Premier says.
International Business supported 5,047 jobs, a 2.4% annual increase. Total employment income in the sector
is up 12.3%.
Air visitor arrivals increased by 9.6%, and cruise arrivals by 1.9%.
Employment across the country increased in 2024.
It is essential Government policy helps sustain the necessary jobs in the economy, the Premier said.
Inflation eased in 2024, averaging 1.9%.
2023/2024 Fiscal Year
Year ending March 2024, total revenues amounted $1.176 billion, $21 million more than original estimates, mainly due to higher-than-expected payroll tax receipts. Payroll tax revenue was $537 million, $24.5 million above original estimates of $512.5 million.
Current account expenditure for 2023/24 was $977.5 million, $4.9 million above original estimates.
2024/25 Fiscal Year
Revised projected revenues for 2024/25 are $1.248 billion, $16.1 million, higher than original
estimates of $1.232 billion.
Payroll tax revenues are projected at $606.5 million, $26 million above original estimates.
Revised current account expenditure is estimated to be $992.1 million, $128-thousand higher than original estimates.
Capital expenditure is revised at $107.9 million.
Debt service and guarantee management costs are revised at $128.8 million, a million above original estimates.
Budget Surplus last year
The Premier reports a $19.7 million consolidated fund surplus is expected, 19.5 million above original estimates.
The Premier says this Budget marks a turning point for Bermuda, no longer managing deficit after deficit.
He says Government must ensure economic growth is shared fairly across Bermuda’s society.
Cost of living measures
Customs duty on all building materials and supplies currently charged above 10%, will be reduced to a flat 10%.
Tax on fuel will be reduced to 4 cents per litre, a combined 80% reduction if taken with reductions put in place last year. The Premier says this will save the average BELCO customer $300 per year.
Customs duty on all motor vehicle parts will be eliminated, to lower maintenance and repair costs while Government works to repave roads.
The duty free exemption for residents returning from overseas will increase from $200 to $300.
Cell phone tax will be halved from 12$ per month to 6$
As previously reported, the case rate of Land Tax will be reduced from $300 to $250, but it won’t come into effect until 1st January 2026.
Also previously reported, license fees for private cars will be reduced 10%, but it will not come into effect until 1st April 2026.
Proposals not progressing…
Citing fiscal responsibility, the Premier David Burt said some proposals will not be progressed yet.
This includes the elimination of payroll taxes for employers retaining Bermudian employees over the age of 65. This was an effort to maintain Bermudians in the workforce.
Additionally, increasing the tax-free threshold for local dividend income will not progress this fiscal year.
Projected revenues for 2025/26
Government is estimated to take in $1.43 billion.
Payroll tax revenues are projected to increase by $11 million.
No changes to the current payroll tax structure, while the Government awaits recommendations from the Tax Reform Commission regarding the Corporate Income Tax.
The Premier says the provisional figure of $187.5 million in revenue from the C.I.T. has been budgeted.
Projected Expenditure
An estimated $1.11 billion is set to be spent in the coming year, an increase of $118 million.
The Premier explained the seemingly high figure, which includes…
- A baseline increase for all Ministries of 1.5%, amounting to $13.7 million, plus an extra 4.7 million across selected ministries
- Continued social investment, followed last year’s mid-year review, of $14.9 million.
- 4-year compensation agreement with public sector unions, plus funding GEHI and PSSF contributions – totalling around $26 million.
- $56 million towards healthcare, including investments to ensure the launch of Universal Healthcare in 2026
Healthcare costs going up?
Government will expand coverage for annual health exams for all HIP and FutureCare clients.
However, the Premier said Government will not freeze the Standard Premium Rate for a forth year – therefore an inflationary adjustment will be introduced.
Government and the taxpayer cannot support the cost of the hospital alone, the Premier says, and therefore fundraising efforts have been restarted by the Bermuda hospitals Board, and the Premier appealed to the private sector to assist. He cites that the construction of the new acute care wing was supported by $24 million dollars of private sector fundraising.
The Government Employee Health Insurance scheme has faced deficits. This year, shortfalls will be covered with $18 million from the Consolidated Fund.
Capital Expenditure 2025/26
$149.8 million is projected to be spent. Highlighted projects are road works, the installation of a new asphalt plant, investments in affordable housing, upgrades to the Tynes Bay Waste Treatment Facility, investments for the Hospital, and starting the replacement of Swing Bridge.
Debt 2025/26
Debt service, or the interest on borrowing, is set to be $127.5 million.
Gross debt is $3.29 billion. With the Sinking Fund contributions, net debt stands at $3.25 billion, meaning the Sinking fund has been reduced to less than $40 million.
By the next fiscal year, 2026/25, Government expects to repay $500 million of Government debt.
Projected Surplus of $40M+
Revenue for 2025/26 is expected to reach $1.43 billion, and Current Account Expenditure is estimated $1.11 billion, leaving a balance of $320 million.
Of that 320 million, 127.5 million will service debt, and 149.7 is projected to be spent on capital expenditure. The Premier therefore reports a projected surplus of $43.3 million.
Pensions
Changes will seek to make the Public Service Superannuation Fund sustainable, including:
- Phased increases in the age where public sector workers will be eligible to receive a pension
- Increases in contributions from 8% to 10% for most employees, and from 9.5% to 11.5% for uniformed service employee
- Reintroducing annual cost of living increases for public sector retirees
Bermuda’s Contributory Pension Fund must be made sustainable, as it underpins the Social Insurance benefits for more than 14,000 Bermudians, the Premier said. Counter to what the Premier says are misconceptions, he says the CPF is not mismanaged or misused, but soundly managed and invested. The challenges are demographic, the Premier says, with people living longer.
The Premier says we must adjust expectations, and he says Government will bring forward proposals to adjust contributions with a phased increase in age that contributors can receive their pension.
Corporate Income Tax
The Corporation Income Tax Agency has been given an operational grant of $4.78 million in 2025/26. The Premier says the CITA is envisaged to be self-funding from CIT revenues in the future.
First payments from the CIT will be collected in August 2025. Revenue estimates are $187.5 million, which the Premier says allows sufficient headroom to support any variability.
The Tax Reform Commission is expected to deliver its recommendations on managing the new tax environment in June 2025.
FULL BUDGET STATEMENT BELOW:
