KPMG Releases 2025/26 Budget Snapshot
KPMG in Bermuda has released its 2025/26 Bermuda Budget Snapshot which provides commentary on the highlights and its perspective on key items discussed in the Budget Statement.
The document said, “Launch of Corporate Income Tax [CIT] marks an historic shift in Bermuda’s fiscal landscape: The CIT is budgeted to generate $187.5m in revenue this year, $600m annually in 2026/27 and 2027/28, with longer-term expectations of $750m annually. This is a major revenue diversification step in line with OECD’s global minimum tax framework. While promising, reliance on CIT should be balanced with robust planning to avoid overdependence. Proceeds should be strategically reinvested in tax relief, debt reduction, infrastructure and structural reforms.
“Healthcare reform measures are commendable but will require structural investments going forward: The $56.25m allocation toward healthcare reform is an important step toward Bermuda’s goal of Universal Health Coverage in 2026. Expanded benefits for HIP and FutureCare, new funding for the Health Insurance Department, and targeted investment in the Bermuda Hospitals Board reflect a strategic reorientation toward preventative, accessible, and equitable care. However, long-term sustainability will require healthcare cost containment and structural investments.
“Climate change and sustainability still overlooked: As in previous years, the budget lacks substantive mention of climate resilience or sustainable finance opportunities. Bermuda — as a small island nation and a reinsurance and financial services hub — is uniquely positioned to lead in climate and impact finance, which could drive future growth. The Government is urged to incorporate climate strategy and green finance explicitly in future fiscal and economic planning.
“Efforts to reduce the cost of doing business are positive, but broader structural reform is still needed: The 2025/26 Budget provides meaningful relief through customs duty cuts, reduced electricity taxes, and a freeze on payroll tax rates. However, high structural costs — including housing, labor, and energy — remain barriers to competitiveness. Long-term improvement will require a coordinated strategy to address these underlying issues.
“Initial steps toward pension sustainability welcomed, exploring options for long-term reform can prove to be essential: The Budget addresses structural deficits in the Public Service Superannuation Fund and Contributory Pension Fund through phased contribution increases and planned retirement age adjustments. These are prudent first moves toward long-term solvency. However, both funds remain under pressure, and the continued prioritization of this matter and delivering on these proposals continues to be essential towards achieving future sustainability.”
The full KPMG 2025/26 Budget Snapshot follows below [PDF here]:
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“The Budget addresses structural deficits in the Public Service Superannuation Fund and Contributory Pension Fund through phased contribution increases and planned retirement age adjustments. These are prudent first moves toward long-term solvency.”
The fact that the PLP Government is making “prudent first moves toward long-term solvency” means that those pension funds are currently insolvent. That is not a surprise to some of us, but it might be a surprise to others.
Amazing how structural defects are needing to be addressed now when the PLP have been the Government since 1998, except for 4 years.
This is not a balanced budget, nor has a surplus. Where are the costs for 2 new bridges, contribution to the sinking fund, and off balance sheet costs (and many more)?
As to the estimates put forward for the CIT, they must believe in the Easter Bunny and tooth fairies.
In fairness to the PLP Government, the unsustainability of the Public Service Superannuation Fund has been known since before the 1998 election. Both the (now defunct) UBP Government successive the PLP Governments can be criticised for failing to address that issue.
I agree that this is not a balanced budget, and I expect to see income from CIT only after I see pigs fly.
You’ll see pigs fly before the OBA wins again.
“Climate change and sustainability still overlooked” – well, let’s not forget the Government’s justification for solar panels on Government buildings, 70 electric buses, and 13 electric cars for ministers – to fight “climate change.”
As much as I respect KPMG, not one employee in Bermuda can correctly define “climate change.” Just like our Ministers, not one can correctly define “climate change.”