BERMUDA-Government says Bermuda has recorded its first budget surplus in 20 years.

HAMILTON, Bermuda, CMC – Premier David Burt says his ruling Progressive Labour Party (PLP) administration has kept its campaign promise and balanced the national budget, recording, for the first time in Bermuda’s history in 20 years, a surplus of US$29 million.

Burt spoke at a news conference to launch the pre-budget consultation period and the Fiscal Responsibility Panel Report for 2025, which provides a thorough assessment of the recent progress, including the introduction of the Corporate Income Tax, and outlines key recommendations to ensure long-term fiscal resilience.

He told reporters that upon re-entering office in 2017, the PLP committed to returning Bermuda to a position of fiscal strength by balancing the budget.

“I am proud to say that we have delivered on that promise. In the previous fiscal year, 2024/25, the government of Bermuda recorded a budget surplus of US$29 million, the first in over 20 years. For the first time in two decades, the Consolidated Fund took in more money than was spent. This is an overwhelmingly positive development for Bermuda,” Burt said.

He said that this view is strongly supported by the independent Fiscal Responsibility Panel, which stated in its most recent report that “Bermuda’s fiscal position is now stronger than at any time in two decades.

Burt said that the most significant aspect of the new situation is that his government has been able to deliver the surplus while staying true to the mission of fairness.

“We have delivered this surplus while lowering taxes for workers and families, raising pensions for our seniors, increasing scholarships for students, investing in social services, and expanding childcare support for more Bermudian families.

“And, it must be noted, that this budget surplus was achieved before a single dime of Corporate Income Tax was collected! No Corporate Income Tax (CIT) was collected before this surplus.”

He said that for fiscal year 2025/26, the government anticipates yet another surplus, primarily due to CIT revenues, even as he acknowledged that non-CIT revenues are higher than estimated, indicating broader economic improvement.

Burt said the successful implementation of Bermuda’s Economic Recovery plan, spearheaded by the Ministry of Economy and Labour, has led to better-than-expected economic performance in every single year since the COVID-19 pandemic.

“And over the past four years, this PLP government has used this better-than-expected performance to cut taxes for workers and small businesses, while reinvesting in key public services, such as healthcare, education, public safety, and community organisations.”

Burt said that through the US$21.8 million Supplementary Estimate, recently passed in the House of Assembly, the government increased support for the hospital, increased scholarships, digital upgrades, youth services, affordable housing, rehabilitation, more police, stronger borders, and essential government operations.

“We have allocated US$11 million to support salary agreements for Bermuda Hospitals Board staff, helping to retain and fairly compensate the professionals who care for our community.

We also provided funding for residential treatment services, increased support for seniors and persons with disabilities, and expanded youth and mental health programmes.”

Burt said to improve public safety, the government funded the hiring of new police officers and the purchase of modern equipment for the borders. He said that in the education sector, more scholarships are being provided, as well as upgrades to technology in public schools.

Burt said the government is also investing in affordable housing projects and improving public infrastructure, including roadways and parks.

Burt told reporters that the new revenues from CIT will be managed with the same fiscal prudence and long-term focus that have returned the island to surplus.

“The government is proposing a clear, disciplined fiscal framework that ensures Corporate Income Tax receipts will be used to implement the recommendations of the Tax Reform Commission and reduce debt, build financial reserves, and make strategic investments that serve the long-term interests of Bermuda and its people,” he added.

Burt said the forecast shows net debt will fall from US$3.2 billion to below US$2.5 billion by fiscal year 2027/28, adding, “that means less of your tax dollars going to interest payments and more being invested in things that matter like healthcare and infrastructure.

He said that the proposed framework includes two key rules: a direct rule requiring the current budget to remain in balance or surplus, excluding CIT revenues, capital spending, interest payments, and structural transformational investment/healthcare.

He said the debt and assets rule means that over a rolling three-year period, at least 70 per cent of net CIT revenues should be devoted to paying debt interest, reducing net debt, or accumulating net financial assets.

“This approach is aligned with international best practice and continues the government’s consistent approach to tax reform, which the Fiscal Responsibility Panel commented was ‘swift, strategic, and executed with an impressive level of competence,” Burt said.

He said they also commended the work of the new Corporate Income Tax Agency, saying that its development and early operations have been “imposing and provide a sound foundation for a robust tax administration.

“With this solid foundation in place, we must also use CIT revenue wisely to ease the cost of living and doing business in Bermuda, which is a key point of the press conference as the Pre-Budget Report sets out what the Government is seeking to do in the future,” Burt said.

He said that, to this end, the government is considering several targeted policy proposals during this consultation period, recommended by the Tax Reform Commission and business stakeholders.

These proposals include the new proposed fiscal rules to ensure long-term sustainability, including a balanced current budget a three-year debt over asset rule; customs duty reductions, including expanding the list of essential items and revising vehicle duty thresholds to reduce the cost of purchasing a private vehicle and a proposed 10 per cent reduction in vehicle licensing fees included in last year’s budget which will come into place April, 1, 2026.

He said further reductions in employer payroll tax, including eliminating it for employers who retain workers over 65, as well as increasing the local dividend tax exemption threshold from US$10,000 to US$25,000, are also included in the proposals.

Burt said utility tax relief, including reducing or removing customs duties on electricity production, even further, “we have cut them by 80 per cent with a view to eliminating them.

“Also considering a recommendation of the Tax Reform Commission of eliminating payroll tax on bulk generation, contingent on savings being passed on to consumers.

Payroll tax reductions for lower- and middle-income workers or those making below US$96,000. The expansion of healthcare subsidies for seniors, low-income earners, and the underinsured is also a recommendation of the Tax Reform Commission,” Burt told reporters.

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