Bob Richards: Bermuda Dollar Now Devalued
During the debate on the 2010 Budget in the House of Assembly today, Minister of Finance Paula Cox [PLP] introduced an amendment that doubled the rate of Bermuda’s Foreign Currency Purchase Tax from 0.50% to 1.0%.
Speaking to the amendment, Shadow Finance Minister Bob Richards [UPB] described this proposed increase as effectively devaluing the Bermuda dollar, as it had the effect of making the Bermuda dollar now worth one cent less than the US dollar.
Speaking immediately after Mr. Richards was Marc Pettingill of the Bermuda Democratic Alliance, who said that he largely agreed with the point offered by Mr Richards.
The amendment was further debated and then passed.
The Bermuda Government itself is exempted from the Foreign Currency Purchase Tax, which is expected to raise an additional $14.5 million in revenue over the next year. This raise comes only three years after the last increase in 2007, which saw it jump from 0.25% to 0.50%.
During the debate this evening, the UBP’s Bob Richards said that the new amendment had the consequence of increasing the cost of all commodities purchased from overseas.
The increase has already come under fire from various members of the business community. Jim Butterfield, President of Butterfield & Vallis, says the increase will cost his company around $350,000.
One can assume that all companies who import goods will not be able to absorb the losses, so the increased costs may be seen at the retail end by consumers.
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