Minister Richardson: Gas prices show transparency

POSTED: 11/14/14 9:16 AM

St. Maarten —In the wake of criticism levied at the inclusion of the turnover tax in the price breakdown for petroleum, Tourism Minister Ted Richardson has said the price is correct and the total breakdown was revealed in an attempt to be transparent.

Earlier this week the complete price breakdown for petroleum was provided while announcing that the price of gasoline at the pumps had gone down and the breakdown included the turnover tax levied on this gasoline. There have since been much discussions on the cost of petroleum products with members of the public indicating that government is overcharging for this item because the TOT is included in the price build-up.

“The TOT is an indirect tax, a gross receipt tax with the character of a consumption tax, which is levied on sales of goods and services at every stage in the supply chain as it makes its way to the final end user and is aimed to tax the consumption of goods and/or the use of services,” a press release from Minister Ted Richardson states, adding that persons can review  the explanatory note “by the introduction of the Ordinance on Turn over Tax 1997, P.B. 1996, no. 210, Statenstuk, zitting 1996-1997, no. 3, Memorie van Toelichting.”

The minister noted that TOT is very similar to a sales tax; whereas a conventional sales tax allows the seller to itemize the tax separately from the price of goods or services, the TOT requires it to be included in the price (tax-inclusive). As such, it is allowed to charge TOT at every step in the supply chain, from the wholesaler, to the retailer, to the end consumer.

The TOT is calculated over the turnover the entrepreneur has realized. “If a company sells a product for one guilder to a consumer (thus the consumer pays the one guilder) the entrepreneur is required to pay a five percent turnover tax over his gross receipt of one guilder to the government.  Therefore if the entrepreneur sells a product for one guilder, then in this one guilder should also reflect the TOT, which is included in the price-buildup,” Minister Richardson explained.

The minister explained that the decision to show the thorough and complete breakdown of all the components that determine the price build up, which also included the TOT, was taken by his ministry in response to the current discussions regarding the cost of petroleum products.

“This approach was taken in order to be transparent and to help the public understand the pricing structure. In conclusion, it should be noted that the calculation and the pricing of Petroleum Products by the Ministry of TEZVT is correct.”

Questions may be referred to the Minister and inquiries directed to EVT.Inquiries@sintmaartengov.org.

 

 

Did you like this? Share it:
Minister Richardson: Gas prices show transparency by

Comments are closed.