THURSDAY, 14 FEBRUARY 2013
PHILIPSBURG–St. Maarten is not levying indirect taxes on goods to Saba and St. Eustatius; it is the Dutch Government that decided to levy the same taxes as in The Netherlands on the islands, including a General Revenue Tax, says Prime Minister Sarah Wescot-Williams in her reaction to a strongly worded letter from Dutch Minister for Interior Affairs and Kingdom Relations Ronald Plasterk warning St. Maarten to cooperate in several issues of importance to the two Dutch Public Entities.
He called on St. Maarten to stop victimising St. Eustatius and Saba and said it needs to cooperate in the interest of its two smaller sister islands.
“That is where the so-called double taxation comes from and not in any way a taxation that happens from St. Maarten. We indicated to Minister Plasterk that our Turnover Tax [(ToT)-Ed.] is not of the same construct as a value-added tax,” Wescot-Williams told the press during Wednesday’s Council of Ministers Press Conference.
ToT is part of a business turnover and is calculated as such, an explanation that was made “very clear” to Plasterk. “The idea that this tax is some form of a duty that we are imposing on transported goods is simply incorrect.”
There is no holding area anywhere in St. Maarten for goods from elsewhere in the world to be transported directly to Saba and Statia and where ToT is levied by businesses indiscriminately in spite of who buys the goods subject to ToT.
Government had indicated to Plasterk that the tax situation is “more complicated” than “imposing a duty” on items bought on St. Maarten that are intended for Saba and Statia.
Government had asked Plasterk after a meeting here in January to put the specific concerns about the ToT, fibre optic cable and medical evacuation service “in writing,” but not in the kind of tone that is being conveyed in his letter and in the media. That request for information in writing was made after he could not provide details during the meeting.
“I will stay above that tone and give the necessary explanation on those items … Despite the tone of the letter and the subsequent reports in the press … within the Kingdom, where it reads that Minister Plasterk is calling me as Prime Minister to order where these matters are concerned, I do not want to use that same tone in my reaction. I do, however, want to clarify some matters and I do believe that some things need to be set straight,” said Wescot-Williams.
The concerns were to be outlined in a letter in which Plasterk also had agreed to offer possible solutions, according to Finance Minister Roland Tuitt. “Not one solution was mentioned in the letter.”
In Plasterk’s letter sent to Wescot-Williams via the Dutch Representative in Philipsburg on Friday, Plasterk urged St. Maarten to cooperate in four areas: the double indirect taxation of goods that are shipped to St. Eustatius and Saba via St. Maarten, the medical emergency transportation by helicopter, the airport tax component of tickets on Windward Islands Airways International Winair and the landing of the optic fibre cable for St. Eustatius and Saba.
Wescot-Williams said the Dutch Government, which is now directly responsible for Bonaire, St. Eustatius and Saba (formerly called the BES islands), should realise that “before there was BES, there was SES [St. Maarten, St. Eustatius and Saba-Ed].” The relationship among the three islands “goes back much longer than there was a BES which became an integral part of The Netherlands.”
Regarding the medical transportation helicopter, the Prime Minister said government still had not gotten a firm hold on that issue and problems apparently faced in the provision of the Medevac service from St. Maarten to Saba and St. Eustatius. “We are still looking at why the information is being sketched in the way that it is by the Minister and who in fact the responsible party really is in a case like this.”
Wescot-Williams said she had “clearly informed” Plasterk that flights to Saba and Statia had been carried out at a loss for a very long period and that the former Netherlands Antilles Government had subsidised flights so tariffs would remain at a certain level.
The Antillean Government had committed to a subsidy, but did not live up to this. With the constitutional change as of 10-10-10, St. Maarten and Winair needed to perform a recuperation of the airline.
The Dutch Government is a Winair shareholder, is represented on the airline’s board and has been part of the reorganisation.
She pointed out that government had never stated to the Dutch minister or any Dutch authority, “We are not willing to talk, but it cannot be so that the Dutch Government tells us that it is not a matter for governments to discuss.”
On the landing of the fibre optic cable in St. Maarten by the Dutch, Wescot-Williams said government had awaited information on the technical aspects of the placement such as Environmental Impact Assessments and other matters.
Government had explained to Plasterk its feeling about the fibre optic cable project and the possibility of it causing competition for St. Maarten Telephone Group of Companies TelEm, among other entities.
“The tone set by Minister Plasterk is that on St. Maarten, we are not allowed to have objections as a country … In this case we hear from the Dutch Government that this is a business venture which takes place and has no implications for Government; absolutely not.”
If Plasterk cannot discuss alternatives that both governments have worked on “to really make this a win-win situation for all parties, then we have to play along the formal way in which they get an answer based on the request for the landing of this cable.”
“We already have a fibre optic cable managed by TelEm, with which we have made a lot of progress in its management and to have an additional cable come to St. Maarten without discussing the connectivity to that cable would not be in the interest of the people of St. Maarten,” stressed the prime minister.