CFT welcomes government’s plans to strengthen Tax Office

POSTED: 01/19/12 1:55 PM

Chairman of the Board of Financial Supervision (CFT) Age Bakker makes a point during Wednesday’s press conference, while CFT Board Member Richard Gibson Sr. looks on.

Bakker: We are cautiously positive in the assessment of the budget

St. Maarten – The Board of Financial Supervision (CFT) has welcomed the government’s plans to strengthen the Tax Office as a means of increasing its income. The plan is a part of a draft road map to improved financial management that the Finance Ministry and the CFT are developing in response to the recent report by the Public Expenditures and Financial Accountability (PEFA) – an arm of the CFT. The government scored failing grades on 23 of the 28 indicators and now they and the CFT plan to work together to improve things by 2015.

“The PEFA process is an objective benchmark. I was not surprised at the poor scores because St. Maarten is a young country. We have now drawn up a five year plan with three to four priorities that are achievable and each yeah will have a building block. My understanding is that strengthening the tax office is the priority in year one,” CFT Chairman Age Bakker said.

The focus on improving the tax office will last into year two and as things move along focus will also be placed on better administrative procedures and better accounts. The CFT believes that having an office here will help in the implementation of the road map.

Economy

Bakker repeated the board’s position on Wednesday that any downturn in the economy will lead to the government having to submit budget amendments with lower revenue projections. He’d already sounded this warning on Tuesday when he said in a variety of meetings that the 2012 Budget will be implemented under “difficult circumstances because of the state of the world economy.”

“Close monitoring will be needed and the budget may need to be adjusted. I believe the government will inform parliament on specified dates,” Bakker said.

Later he’d add, “There is a risk of a downturn in the economy in 2012 that will also lead to a downturn in budget projections. When that becomes clear there may be a need for a revision. There is no way, though to know how much of a downward trend it will be.”

Budget

More generally the CFT is pleased that the government will present the budget to Parliament soon. They believe submittal and adoption by February will represent an improvement over last year when the budget was only approved in August. The CFT also believes that approval in February will also give the government time to have an approved budget for 2013 by December 15 – the ultimate deadline for this to happen.

“We are pleased that the government requested an advice in advance and we have the expectation that it will be presented soon. We are cautiously positive in the assessment of the budget but will give a final advice when the budget has been approved by parliament,” Bakker said.

Annual Accounts

The government has also been advised to clear up the backlog in its annual accounts. The 2010 financial statement has already been completed and sent to the relevant agencies.

Dividend Policy

The CFT also used its meeting with government to stress the need for a concrete dividend policy. Finance Minister Hiro Shigemoto had said last year that he was busy crafting one, but it has apparently not yet been approved. The CFT believes the policy is an important point in the discussion about corporate governance, but has left the ultimate decision on this up to parliament.

“We have suggested that the government consider the pros and cons and the government seems to have taken note,” Bakker said.

Social Premiums/Pensions

The CFT has also suggested the government investigate how costs associated with social premiums and pensions, which are hitting levels higher than previously projected, will affect their multi-annual budget.

“Countries all over the world are confronted with increasingly unmanageable costs in these areas, other than was originally expected when these systems were designed. It is therefore prudent to obtain timely insight on these matters on St. Maarten and to plan to effectively cope with potential problems,” Bakker said.

Did you like this? Share it:
CFT welcomes government’s plans to strengthen Tax Office by

Comments are closed.