Hassink: Tax compliance lax

POSTED: 07/2/13 12:43 PM

St. Maarten -Approximately 6,500 are still to pay their road tax with the government collecting close to 6.6 million guilders at the end of June. Finance Minister Martin Hassink believes that it is reasonable to assume that his predecessor’s plan to revamp the tax administration on St. Maarten and also repeal annual changes to vehicle license plates, has failed. Hassink explained that annually government collects at least 8 million guilders in motor vehicle tax however this year’s shortfall could be as a result of taxpayers capitalizing on not having to change their number plates which in the past distinguished errant drivers.

He said that some control mechanism needs to be implemented, either a sticker or the reintroduction of annual number plates especially since the government will need all the revenue it can accrue to balance the Budget. Fines may also be implemented for people who failed to pay their road tax in time, the minister added.

Tax compliance in general is proving problematic for the government.

“In Curacao there was a study done that concluded that especially in the retail sector, people are not complying with tax regulations.” The minister said that he fears the same may be occurring on St. Maarten but the government would have to tackle one issue at a time; starting with the 2013 budget.

It is difficult to track certain people and businesses that are engaging in tax evasion among residence, non-residence, businesses and foundations because many of government’s systems are fragmented.

“A lot of databases we have are not much reliable but the effort is to get it (tax evasion) as small as possible.”

In order to find and ensure that each person pays their fair share, the minister suggested that government may have to cross check data with companies like Gebe or even attempt another correlation with the Chamber of Commerce, which he admitted had failed in the past.

Other initiatives such as the alcohol and tobacco tax as well as additional levies on the casino industry are not realistic at this time, the minister added. He said that such changes would have far reaching effects and no new system should be implemented without thorough feasibility studies being done.

420 million guilders is usually collected in taxes annually.

 

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