Government plans to proceed with the proposed Sugar Tax right after the consultation process ends on March 1, 2018.
Following the recent consultation paper, Premier David Burt said his administration will move “in line” with the Health Ministry’s plan to combat epidemic proportions of diabetes and obesity in Bermuda.
The new sugar tax will be coming soon to a store shelf near you “on a defined group of items”.
“The sugar tax will be finalised after the consultation period ends on 1 March 2018,” said Mr Burt.
But to “offset the expected increase in customs duty”, he said: “The Government will reduce or eliminate duty on healthy food items.
“Accordingly, duty will be reduced from 5 percent to 0 percent for eggs, potatoes, cauliflower, broccoli, carrots, turnips, oranges and apples.”
And a portion of the revenue generated by the sugar tax “will be earmarked for educational programmes to improve health outcomes”.
As parliamentarians get set to deliberate what constitutes a ‘liveable wage’, “to reduce the cost of living” he said the Government will “lower” duty rates on textiles, including linen, blankets and shoes.
Duty relief will also be provided to sporting clubs with youth programmes. And this relief will include “full duty relief on uniforms and equipment purchased and used by these clubs”.
Moving forward, he said the Ministry of Finance, in consultation with the Health Ministry, “will further increase the duty on tobacco to reduce the inconsistency between duty rates on cigarettes and tobacco”.
Duty on wines will also be raised by 30 cents per litre as of April 1, 2018 “to achieve additional customs revenue”.
“The yield from customs duty is estimated at $235 million, 21.6 percent of total Government revenues,” Mr Burt said.
Imported goods by local retailers were a major contributing factor.
As a “consistent provider of Bermudian jobs”, he said the Government “will work with this sector to promote its growth”, with a view to producing more “Bermudian jobs”.
He noted that the new Tax Reform Commission will lead the consultative process “to determine how tax policy can be adjusted to assist in encouraging investment”.
The list of investment options encouraged included “investment in facilities, diversification of product offerings and most importantly growing the sector to produce Bermudian jobs”.
As Minister of Finance, he also noted that the yield from custom duty in the upcoming fiscal year, is “estimated at $235 million, 21.6 percent of total Government revenues”.