Finance Minister Tuitt says goodbye to old taxes

POSTED: 02/7/13 12:42 PM

St. Maarten – Through a ministerial decree, Finance Minister Roland Tuitt has been able to begin the write off of back taxes owed by citizens and businesses from 2006 and older. Tuitt still has to send a law proposal to Parliament to structurally “park up” the old receivables but he told the media yesterday that the Receivers and his office have been able to mutually agree on the process. He could not say how much money the government plans to write off but suspects that the total should be in the billions.

“But these amounts don’t mean anything because they are fictitious amounts. Most of these amounts for everyone who did not file their taxes got an assessment of 150 thousand guilders or more. So the amount, I am sure, is in the billions but it doesn’t mean anything,” the minister said.

The only tax that will not be written off is AOV which falls under the responsibility of the Social Security Bank (SZV).

Tuitt said that devising a proper write off procedure was a struggle but he consulted 6 lawyers from within the government and externally and he was advised on how to execute the procedure properly.

Although he did not get Parliament’s approval, Tuitt does not see the tax write off as circumventing the rules of good governance.

“The Minister of Finance has the authority to establish a policy as far as financial activities of government are concerned. The policy is that we should try to get the collection process up to where it is supposed to be.”

As he explained it, the tax write off process is to be done in 2 stages, the minister said; the first being a ministerial decree and the second being the ratification of his draft legislation in Parliament.

This means that anyone who owes back taxes from 2006 and earlier can disregard them.

“When you go to the Receiver you do not have to deal with those taxes,” the minister reiterated.

Ideally, the Receivers office should only be collecting tax payments for the previous year (2012) and the current year (2013). This is the government’s ultimate goal, Tuitt said, but it is nowhere close to this.

“If we don’t start to take steps to achieve that goal then 10 years from now we will still not be close to that goal. These old debts have been expired already. You still are not supposed to be able to collect them but because of certain techniques, the Receiver’s is still collecting them. We are wasting time trying to collect them.”

The government also wants to get rid of receivables for 2007 and 2008.

“If we get rid of those two in this year, then that means that we only have five years dealing with now (2009 to 2013) which is in accordance with the law,” Tuitt said.

In 2014, he wants to get rid of another 2 years of old taxes; 2009 and 2010.

Outlining the steps taken to reach an agreement with the Receiver’s, Tuitt said that he wrote a letter to the agency prepared by an expert at the Tax Office. It was then taken to the Ministry’s legal department which made adjustments before being forwarded to the Receiver.

The Receiver then responded to the letter, with a meeting subsequently being called between the government’s lawyer, an employee of the personal department and the Receiver’s. Following that meeting, the Receiver’s sent another letter to the minister indicating that several points needed to be executed for the process to become official.

 

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