Minister Tuitt: “Situation is not really gloomy” Higher turnover tax on alcohol and tobacco

POSTED: 11/23/12 1:36 PM

St. Maarten – “The situation is not really gloomy, but it is not where we want it to be.” With those words, Finance Minister Roland Tuitt concluded his presentation yesterday in the central committee about the country’s financial situation.
However, if nothing changes, the 2012 budget will close with a 17 million guilders deficit, Tuitt said. “And if the 2012 budget and the budgets thereafter are not balances, the Cft will not approve loans we need to finance investment programs.”
Minister Tuitt said that the government is looking for additional revenue in 2013. A dividend payment from the Central Bank could bring in an additional 1 million guilders, he said. Another plan is to increase the turnover tax for alcohol and tobacco.
“Those are pleasure items for individuals. If you abuse them you will catch up with the government when it has to cover your medical expenses,” Tuitt said.

The minister also wants to get more revenue out of the Bureau Telecommunication and Post, and dividend payments from government-owned companies.
“Some companies pay dividend, some pay a license fee and some pay nothing at all. The airport does not pay anything to the government at the moment. We’ll have to look into the possibilities, because some loans have been granted on the condition that the airport did not have to pay any dividend to the government.”
Other companies where the finance minister wants to collect dividend payments are telecom providers UTS and TelEm.
Minister Tuitt said that, while the ministries were under-spending in the first two quarters, their spending was on a par in the third quarter. Because cash receipts fell short, especially in August, measures are required, the minister said. On the expenditures side, the government intends to follow the Cft’s advice for a personnel stop. “Maybe that is a big word,” Tuitt said. “Because this does not mean that the government won’t be hiring anybody anymore. We will only be filling critical positions.”

The minister said that he will present a balanced budget before year’s end to the parliament. By the end of this month it will be ready to go for advice to the financial supervisor Cft.
Tuitt said that he will address debt relief with the Kingdom government when he goes to the Netherlands. “From 2012 on the Dutch government gives no more money for social projects to St. Maarten. We think that this is unfair, because there is still money going for social assistance to other countries in the world.”
“We want the Dutch to look at debt relief one more time. We were promised a clean start but we did not get it. Instead, on 10-10-10 we inherited a debt of 302 million guilders. The basis for the existence of the financial supervisor Cft is that clean start. That is why we will bring it up one more time.”
The national debt poses a problem, also because of the interest burden standard that is regulated in the Kingdom law on financial supervision. The rule is that St. Maarten is allowed to pay at most an amount in interest equal to 5 percent of the average government revenue of the past three years. In the current situation, Tuitt said, this leaves room to borrow at most 42 million guilders in 2013. “After that we won’t be able to borrow anything anymore until 2015.”

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