Tuitt announces simpler tax systemPOSTED: 07/12/12 11:59 AM
St. Maarten – Finance Minister Roland Tuitt intends to merge several taxes into one to lighten the administrative burden on companies and the receiver’s office.
“We will merge taxes wherever it is possible,” the minister said, adding that the tax inspectorate is working on the plans.
The minister said that the financial supervisor Cft has asked for more information about the plan of approach for the tax inspectorate. The inspectorate recently hired six more staff.
“We have sent them the plans outlining how we want to build up the inspectorate,” he said.
Another issue the Cft inquired about is the Public Expenditures and Financial Accountability (Pefa) evaluation. Pefa is a Cft-workgroup that evaluated St. Maarten’s financial management in a report that was sent on October 11 of last year to Tuitt’s predecessor Hiro Shigemoto.
“That evaluation was nothing to boast about,” Tuitt said yesterday.
And indeed, when this newspaper obtained a copy of the Pefa-report in December of last year, it showed that St. Maarten did not record a top score on any of the 28 indicators the workgroup examined. On a scale from A to D (whereby A is the highest possible score and D the lowest possible one) Pefa graded St. Maarten with a D or D+-assessment 23 times – a polite way of establishing that the country’s financial management is in a shambles.
“We have embarked on a five-year plan to improve the situation, and we have sent our plans to achieve this to the Cft,” Tuitt said.
The minister noted that the Cft also wanted information about the country’s funds for old age pensions and for social benefits.
“Pension funds work nicely when you have more people contributing to it than people who are benefiting from it,” Tuitt noted.
“The ageing population in Curacao is a problem. Compared to that the ageing part of the population in St. Maarten is relatively small, but we have to take measures now to make sure that we keep a work force of a young age.”
In the Netherlands the retirement age is 65 and the country intends to make this 67.
“We have to look in that direction. In the future we will have to increase the retirement age from 60 to 65,” Tuitt said.
In the current system, pensions are 70 percent of a pensioner’s last earned salary, but that will have to change as well, the minister said.
“Other countries use the average salary as a basis to calculate pensions. That is more manageable and it will offer better chances to people who pay into a pension fund to get paid by the time they reach retirement age.”