Chamber Responds To 2025 Budget Statement
The Bermuda Chamber of Commerce has responded to the 2025/26 Budget Statement, saying they “will continue to advocate for evidence-based policy, structural reform, and inclusive economic growth.”
A spokesperson said, “The Bermuda Chamber of Commerce welcomes the opportunity to respond to the 2025/26 Budget Statement delivered by the Honourable David Burt, Premier and Minister of Finance, on 2 May 2025.
“We extend our appreciation to the Premier for joining Chamber members at our Annual Budget Breakfast, where productive dialogue on Bermuda’s fiscal strategy and economic development was encouraged. This response is also aligned with the Chamber’s March 2025 Economic Report, which identifies cost-of-living pressures, housing needs, business sustainability, and demographic shifts as critical challenges requiring urgent attention.
Progress Acknowledged: Fiscal Surplus and Tax Reform
“The Chamber commends the Government for achieving a $19.2 million surplus for 2024/25—the first in over two decades—and for introducing a Corporate Income Tax [CIT] as a cornerstone of Bermuda’s tax reform strategy. These are important steps toward fiscal sustainability.
“However, the $54 million increase in net debt—despite the surplus—suggests $73.2 million in non budgeted spending, raising concerns over fiscal transparency. The shift from fully repaying the $605 million bond due in January 2027 to a partial repayment plan of “up to $500 million” marks a departure from the recommendations of the Fiscal Responsibility Panel.
“With CIT revenue projections now revised downward from $750 million to $600 million, and the sinking fund projected to fall $18 million short by March 2027, we urge Government to maintain a conservative approach. A 10% revenue shortfall in CIT could expand the debt gap to $91 million, putting Bermuda’s repayment plans at risk. We reiterate the importance of prioritizing CIT revenues for debt reduction and publishing transparent financial projections.
Public Spending: Growth, Transparency, and Infrastructure
“The 2025/26 Budget introduces a $120 million increase in Current Account Expenditure—of which $64.8 million is related to employee costs. This represents a 12.7% increase over the revised 2024/25 estimate, and an 18% rise over the 2023/24 Budget. While not all salary-related, this growth reflects broader challenges shared by both public and private sectors in workforce costs and retention.
“The capital expenditure commitment—$150 million this year and $362 million projected over the following two years—has the potential to address critical infrastructure and housing needs. We await detail from the Bermuda Housing Corporation on whether this includes the creation of new housing units or the refurbishment of existing stock. A transparent rollout plan will be necessary to track impact, delivery, and alignment with Bermuda’s long-term housing strategy.
Local Business: Under Pressure and In Need of Support
“The Chamber appreciates that the Budget did not introduce new business taxes and recognizes progress made through the adoption of Chamber recommendations, such as the review of duty relief for construction.
“However, we are disappointed by the lack of targeted support for retail and wholesale businesses. These sectors employed 4,008 workers in 2024 but have suffered a 3.4% decline in retail sales volume since 2019. Apparel sales are down 19%, food by 9.75%, and other categories—including appliances and pharmaceuticals—by 5.86%.
“While increasing the personal duty exemption from $200 to $300 may offer relief to travellers, it further disadvantages local retailers already struggling with shrinking margins. The Chamber has concern for the potential impacts on variety, value, and quantity of items in local stores. We are supportive of any efforts to identify ways of lowering cost of doing business, however, we are a view that price controls or overly excessive price management will not provide the desired outcomes and are likely to have other, more far reaching unintended consequences, negatively impacting the residents of Bermuda. We must take a wide, collaborative approach that assesses the full operating landscape and ensuring that the principles of a free market are maintained – this is when business, consumers and government operate most efficiently.
“We call on Government to accelerate a comprehensive duty review for these sectors and to deliver actionable outcomes from the Tax Reform Commission and Cost of Living Summit aimed at lowering operating costs.
Addressing Inequity in Restaurant Taxation
“The Chamber also highlights a long-standing inequity in the taxation structure applied to restaurants— specifically, between table-service dining establishments and takeout or counter-service restaurants. Under the current system, full-service restaurants—many of which benefit from higher-margin alcohol sales—are taxed at a lower rate than takeout-oriented businesses.
“Although these functional distinctions predate the COVID-19 pandemic, the pandemic made the inadequacy of this model clear. During extended lockdowns, full-service restaurants operated primarily as takeout providers, a model many have continued in hybrid form today. Yet outdated definitions in the tax code persist—definitions that no longer reflect the realities of the modern food service industry.
“This disparity places a disproportionate burden on smaller and newer restaurants, which are often owner operated and more vulnerable to fluctuations in cost and demand. It creates confusion, breeds frustration, and institutionalizes an unfair competitive environment.
“This matter has been raised with Government for several years with little progress. Action is now overdue. The Chamber urges an immediate review and modernization of restaurant classifications and tax treatment to ensure that Bermuda’s tax policy is equitable, consistent, and aligned with the operational realities of today’s hospitality sector.
Healthcare and Workforce Policy: Facing Demographic Headwinds
“The Chamber supports the Government’s $56 million investment in healthcare. However, we stress the need for greater detail on how these funds will be allocated and a timeline for the implementation of universal healthcare to ensure that investment translates to measurable outcomes.
“The Budget’s reference to the strain on social insurance contributions due to an aging population underscores a demographic challenge requiring urgent immigration reform. A reduced population and a 1.6% unemployment rate point to a tightening labour market that may hinder growth and exacerbate inflation, a similar concern raised by Minister of Finance at the Budget Breakfast on Monday, 5 May 2025.
“We recommend a prompt review of closed and restricted job categories—last reviewed in February 2025 with no changes—to ensure they reflect current labour needs. Additionally, a national housing strategy that supports workforce expansion will be essential to future economic stability.
Inflation, Investment, and Economic Indicators
“From 2019 to 2024, GDP grew by 8%, largely due to a 43% rise in external balances of goods and services. However, domestic capital formation declined by 18.7%, and final consumption grew just 1.4%, indicating subdued local investment and modest consumer confidence.
“While the reported inflation rate of 1.9% appears favourable relative to global benchmarks, it does not reflect Bermuda’s true cost-of-living pressures. For instance, Government data suggesting that non-rent controlled rents are 4% below December 2018 levels is inconsistent with the lived reality of many households. We call for a more accurate and comprehensive approach to inflation tracking and affordability analysis.
Looking Ahead: Stability Through Prudence and Partnership
“Though the Government’s surplus and capital investments are welcome, they must be viewed through a lens of long-term prudence. The interplay between rising operating expenditures, early-stage CIT revenues, and Bermuda’s $2.123 billion unfunded pension liability [as of March 2024] demands careful stewardship.
“We urge the Government to establish transparent capital project milestones and timelines, and to develop a structured plan to address pension sustainability.
“The Bermuda Chamber of Commerce remains committed to partnering with Government and all stakeholders to support Bermuda’s economic health and competitiveness. We will continue to advocate for evidence-based policy, structural reform, and inclusive economic growth.”
“However, the $54 million increase in net debt—despite the surplus—suggests $73.2 million in non budgeted spending, raising concerns over fiscal transparency.”
Oops.
non of this matters, people either dont vote or ignore any fact that goes against their preconceived notions…. The PLP haven’t balanced a budget in 25 years…
“The PLP haven’t balanced a budget in 25 years…”
Well, 20 years anyway. And it does matter. Especially when the PLP Government continues to deceive the taxpayers and the electorate.