More budget headaches underway

POSTED: 11/22/12 1:30 PM

St. Maarten – The government is still trying to balance the 2013 budget and Finance Minister Roland Tuitt hopes to have it reach parliament and the board for financial supervision Cft by December 15. Today, Tuitt is expected to speak in parliament where he will provide more details on the 2013 draft budget. However, there are some issues that continue to pose a problem for the Finance Ministry. Disappointing returns on profit taxes from businesses and the way how financial supervision is structured are playing a significant role in the greater scope of things.

Businesses usually have to file their profit tax return by June 30 of every year.

“What a lot of businesses do is that they ask for extension. The tax office usually complies with the extension and gives them until year end to file the profit tax.”

Tuitt said that based on expectations, businesses will comply by paying the projected profit tax by the end of this year.

“We are still hopeful that the profit tax will generate what we projected. In the budget of 2012, 38 million guilders has been projected but the disappointing news is that we have collected only 18 million guilders to date.”

He hopes that 20 million guilders will be collected by the end of December. If this does not occur, the country will be left with a deficit which will then have to be accommodated in the 2013 budget.

“This will give us more headaches,” Tuitt said.

He added that “The CFT looks at how much money we collected the year before and they then use that as the ceiling for the revenues that will be collected in the next year. In this case the money that is collected this year will be used as the revenue ceiling for the year 2013.”

In 2011 approximately 415 million guilders was collected.

“If we continue with the projections the way they are we will come out around 415 to 420 million guilders as a ceiling. If that is used then we will have a deficit to work with as far as the 2013 budget is concerned.”

The Minister said that based on the reality of the situation there are only two solutions currently; either decrease government spending or raise revenue.

“Raising revenue is not the first priority that we look at. That is why we are trying to put procedures in place so that the collection that we project can be realized.”

As he had stated on previous occasions, Tuitt said that the government is still looking to engage the CFT and new Dutch government to spread the deficit over a number of years.

New tax structure should be implemented by 2014 and he wants the new tax structure to be based on a scheme that does not include deductions.

He is also still trying to devise a plan to finalize old debts from institutions such as BZV and SZV and the pension fund.

“We have to come up with a plan to finalize the debts so that they don’t come up and haunt us all the time,” the minister stated.

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