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CFT issues negative advice on St. Maarten budget, government submits info late

TUESDAY, 08 JANUARY 2013

PHILIPSBURG–The Committee for Financial Supervision CFT has issued “a negative advice” on the draft 2013 budget “due to some technical issues,” including the fact that government was late in submitting necessary substantiating information on revenue-generating measures. CFT has indicated its concern about government being able to raise revenue via increased tax compliance. The advice also has been sent to the Kingdom Council of Ministers in The Hague for its perusal. Finance Minister Roland Tuitt said at a press conference Monday that the National Alliance (NA)-led government had sent additional information on the draft budget “late,” so by the time CFT had received the information the negative advice already had been issued. “What is happening right now is the CFT is taking the additional information that we sent to them into consideration and they will adapt their advice hopefully within a week or so,” Tuitt said. “That information they are taking into consideration now and I am hopeful that they will change their opinion.”

CFT has submitted some 16 questions on the draft to government, covering topics such as the plan to increase tax payment compliance by businesses and individuals as a means of increasing government’s revenues this year. Government will submit its answers and reaction to the advice by Friday. Dealing with tax compliance, Tuitt said that if “a quick calculation” were made, government’s aim of increasing compliance by 10 per cent could be seen. A 10 per cent increased compliance on a budget of some NAf. 476 million would amount to some NAf. 48 million. However, government has taken an ultra-conservative route by budgeting only just under half of that amount: NAf. 20 million. “We are saying as a government that we are going to increase compliance by less than five per cent,” the minister said.

At least three reports on increasing compliance, including one from the Receiver’s Office, have been sent to CFT by government. CFT has advised that the NAf. 20 million be reduced to NAf. 10 million, he said. Government “didn’t do much” to drum up compliance last year, but tax payment was up by some NAf. 6 million. “… Then we are only talking 14 million and if the CFT is saying 10 million is realistic then we are only talking about four million extra that we are fighting about,” the minister pointed out. “The CFT should be able to accept a risk of four million guilders.” CFT is “a little hesitant, because once you are a rude child, you can’t always be a rude child, so I am telling the CFT that this is a new government. This is a government with a different vision than the past government and we should be treated as such and not look at the past,” Tuitt said.

The minister said CFT “got burned” in 2012 by approving the NAf. 20 million budgeted by the then United People’s (UP) party-led coalition for collection of back taxes from non-resident condo owners. That full amount was never realised. The taxing of non-resident condo owners and increasing compliance of taxpayers are “two vastly different things,” he explained.

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