Opinion: Turnover tax

POSTED: 01/5/12 1:10 PM

Since we’re not soothsayers we actually have no clue about what our Finance Minister has in store for tax reform.

But based on universal analysis of political behavior, we’re pretty confident about one thing: the turnover tax is not going anywhere; it is here to stay and there is no way in hell that Minister Shigemoto is going to turn back the hands of time, and the turnover tax-rate with it. If we’re lucky, it will stay at the current 5 percent. If the need at the Finance Ministry reaches disaster-level, it may very well go up a bit more.

We noticed with some amusement last year how the Chamber of Commerce supported the hike in turnover tax on the condition that the measure would be temporary, knowing all too well that with politicians everything is temporary.

So we may as well get used to the turnover tax. As the Central Bank pointed out in its 2011-analysis, this tax has bumped up inflation and cut into people’s purchasing power. This simply means that consumers had less money to spend, that businesses therefore took less money in and, as a consequence, that government revenue went down with it.

We have written this before: when a government, any government, is short of money, it always turns to its citizens to fill the gap. Never in a million years will they say: well, we’re a bit short this year, so we’re going to cut down on expenses.

Anybody noticed? The representatives of the people, who ought to lead by example, keep driving around in shiny cars that cost a small fortune (certainly in the mind of the minimum wage earners), they keep traveling abroad like there is no tomorrow, they suddenly find money to make the place look good when somebody important, like the queen, comes to visit, and they keep their air conditioning systems humming like electricity costs nothing at all.
No sir, do not ask what the government can do for you, ask what you can do for your wasteful government. That has always been, and will always be, the way politicians look for a way out of the problems they created themselves in the first place. St. Maarten is not unique in this (ask the Greeks) but that is no excuse.

We expect our government to lead by example, but we ought to stop fooling ourselves and wonder how long we want to put up with a government that is not leading by example at all. We all know the uncomfortable answer to that one: a very, very long time.

We must ask ourselves why this is so.

Here are a few hints. Human nature is universal. Therefore it does not make a lot of difference which people are in government, because they are all driven by the same instincts. Some call it survival, some call it greed, and others think it’s just plain stupidity.

The truth is (we’re sure you’ve heard this one before) that every country gets the government it deserves. So we should not complain about a desperate Finance Minister who is for sure going to hang on to his turnover tax, because each and every one of us – had we been in his shoes – would have taken the same decision.

Did you like this? Share it:
Opinion: Turnover tax by

Comments are closed.