No tax-increases in 2015 budget

POSTED: 11/30/14 11:16 PM

Hassink: Clarity about pre-2007 tax debts by next week

St. Maarten – Citizens will not be confronted with additional or higher taxes in 2015, outgoing Finance Minister Martin Hassink said yesterday at what he announced to be his last appearance at a Council of Ministers press briefing. The draft budget contains measures to increase state revenue, but this will come from increased compliance and dividend from state-owned companies. “Gebe and the harbor pay a concession fee and the airport does not pay anything at all,” Hassink said, indicating that he intends to change all this. Between them, the government-owned companies had 240 million guilders in the bank at the end of last year, Hassink said.

Taxpayers will get clarity about their tax debts prior to 2007 by next week, Hassink promised, commenting on the advice from the Social Economic Council (SER) on a decision by Hassink’s predecessor Roland Tuitt to take all tax debts from 2006 and before off the books. At the moment this decision still stands, but in spite of this the tax inspectorate is harassing citizens with tax assessment for 2004, 2005 and 2006.

“My intention is to withdraw that legislation,” Hassink said, adding that he understands the current confusion. Tuitt’s decision stands right now, so it seems awkward that taxpayers are being called on arrears dating from 2006 and before.

Hassink said that the draft 2015 budget will be presented in the Council of Ministers next week Tuesday and that the Council of Advice already has a first draft in its possession. The minister also referred to the initial comments from financial supervisor Cft that wants the government to reduce the 2015 budget from 445 to 426 million guilders due to concerns about the feasibility of projected state revenue.

The 2015 revenue projection is based on the results in the first half year. Hassink acknowledged that the second half of the year has shown lower revenue.

“The Cft believes that 445 million is not feasible but we are contesting that,” he said. “We’re saying that we are able to do that.”

The Cft has also pointed out in its advice that St. Maarten has to compensate the 12.2 million guilders deficits of previous years in the 2015 budget. “That would mean that we have to cut down even more on operational expenditures and that is not possible,” Hassink said. “We will come with an alternative to handle this,” adding that the budget is an annual struggle whereby the Council of Ministers “has to cut its expenditures down to the bone.”

In its draft budget, the government proposes to compensate the deficits it built up since 10-10-10 with revenue from the division of assets from the former Netherlands Antilles. The Cft opposes this. “The resources that become available from the division of assets are already implicitly part of the capital position per 10-10-10 and cannot be used to make up for these deficits. The draft budget 2015 must therefore be adjusted in such a way that it shows a surplus of 12.2 million,” the financial supervisor states in its advice.

In what are the last weeks, or days, of his position as Minister of Finance, Hassink said he is working on a plan to increase government revenue structurally to 500 million guilders a year. Most likely, it will be up to his successor to work this out.

Part of this plan is the continued updating of the administration at the tax inspectorate and the integration of work processes. Ministers will be made responsible for their budgets, based on monthly reports.

Hassink said that the tax inspectorate will go after businesses that have not paid their licenses. “They can soon expect the visit of a tax marshall,” he said.

A revenue increasing and expenditure-decreasing project is in the hands of the government accountant bureau Soab and it is well underway.

Hassink said that based on the results up to the third quarter of this year, the government is facing a 7-million  guilders shortfall, due to lower than expected revenue and higher than budgeted expenditures. Revenue over the first three quarters was 334 million guilders, and expenditures stood at 327 million. Hassink said that in particular personnel expenditures remain a concern.

The finance minister said that the discussion about debt relief is still ongoing (though Minister Plasterk and his predecessors have said on several occasion that the door to debt relief is closed). St. Maarten is also looking forward to receive income from the division of assets of the former Netherlands Antilles.

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