Central Committee meeting on American University of the Caribbean – Illidge motion “Chrismas Joke”

POSTED: 12/13/13 5:16 PM

St. Maarten – National Alliance MP William Marlin called the motion proposed by independent MP Patrick Illidge a “Christmas joke,” in a Central Committee meeting yesterday that often strayed from its main agenda point, the matter of the so-called American University of the Caribbean (AUC) tax write off. At times the meeting felt more like a budget and fiscal debate than a specific discussion on AUC’s tax status. President of Parliament Gracita Arrindell had to remind the MPs to return to the agenda point in question.

The independent MP’s motion called for widespread tax relief, at the discretion of the government for specific types of businesses and individuals, from the period between 2006 and 2010 “considering the lack of economic growth and outcry of hardship of the people of St. Maarten.” Ministers and MPs would be exempt from the relief, and therefore not benefit from it.

MP Marlin (NA) said the motion was unrealistic given that the 2014 budget had not even been discussed yet and there would be no knowing of the impact on the island’s economy without first looking at the budget.  “How do you couple it with unbalanced budgets?” he asked. The motion would add an additional 4 years to former Finance Minister Roland Tuitt’s tax relief period. MP Roy Marlin (DP) vehemently objected to MP William Marlin’s remarks, citing the rules of order, no. 51, where an MP cannot debate a motion once a vote on it has passed. MP Marlin (DP) wanted the Chairlady Gracita Arrindell to have his remarks stricken from the record, but the objection was overruled, citing past precedence, according to Arrindell.

Minister Hassink kept his remarks succinct and to the point, and began his address to Parliament by quoting lyrics from an old Beatles song called the Taxman. He explained that the though the agenda point speaks of a “write off,” the previous owners of the American University of the Caribbean (AUC) were not given a tax write off, but rather that they were assessed by the inspectorate for profit tax after it was sold to the DeVry corporation. He said he is not sure if the tax on the sale should be Naf100 million ($54 million), that was simply the assessment figure by the inspectorate. “It could be less or could be more,” he said.

The former owners took issue with the inspection and the matter is now in court. The minister said that, as far as he knew, no tax holiday was granted to the medical school “otherwise the amount in question would not be so significant.” Hassink stressed that tax matters are private and confidential affairs between the tax authorities and the “client,” as he called it. “St. Maarten’s reputation would be harmed,” he said, as it is not possible to talk about the tax matters of private individuals.

He spoke of the need to upgrade current tax legislation to better fit St. Maarten’s current political and economic reality as the current legislation and codes.”We took over the legislation from the old Netherlands Antilles,” the minister explained.  Hassink proposed to streamline the tax collection process by rolling the various tax entities, i.e. the tax inspectorate, the receiver’s office, etc. into one “well functioning unit.”

He reiterated to the MPs that AUV did not receive a so-called tax write off, and that the matter is beyond the ministry’s control. It is tied up in litigation in the courts. “No ministers were involved,” he said, it was simply the tax inspectorate acting as the inspector, whose “authority is governed by law.” But he added that the “inspectorate does not have the authority to write off taxes. The receiver has that authority.”

MP LaVille raised the issue of businesses using two credit card machines on the island, one with a local bank account and the other with a foreign one, depriving the island of tax revenue. Hassink replied that he is “aware of the credit card machines that have foreign accounts,” and is looking to launch a pilot scheme on Frontstreet and Backstreet with mandatory point of sale systems that are accessible by the relevant tax authorities.

MP Laveist (NA) was adamant in not voting for MP Illidge’s motion as is without having had a thorough discussion on its impact first, though he said he was for tax relief for the general public in principle. The entire NA faction voted against the motion. Independent MP Frans Richardson abstained.

The UP faction was in favor of Illidge’s motion, as was the only DP member present, MP Roy Marlin, and independent MP Romain LaVille.

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