Pandt suggests introduction property and real estate tax

POSTED: 01/5/12 1:17 PM

St. Maarten – Tax attorney Max Pandt made a case for introducing property and real estate tax in a broadcast this week on Oral Gibbes Live. “John Stuart Mill argued to shift taxation away from earned income and move towards taxation on wealth generated by property because of improved standards of living generated by the overall economic condition over several decades,” Pandt said. “This way you also broaden the tax base.”

Pandt said that he learned at a recent IFA congress in Paris that first world countries are considering expanding their tax base by the introduction of a tax on financial transactions. “Governments – including St. Maarten– have to consider legal and scientific means were taxes are concerned to produce proper income for the state for the benefit of all and not for the benefit of special interest groups.”

Pandt also stood up for the high councils of state in St. Maarten that have come under fire from Vice Prime Minister Theo Heyliger, and MPs Leroy de Weever and Johan Leonard. “Under the principle of the Trias Politica there must be high councils of state besides the executive branch as constitutional authority to assist in governing the country. The constitution states this very clearly. This will guarantee a government based on the law and not a government based on individuals exercising authority outside the state organs.”

Pandt said that St. Maarten needs to outgrow the bossman culture and stick to the law.”

He added that the councils of state have a role to play but that they do not sit on a minister’s chair or on the parliament’s chair. “This is why I find the remarks by the speaker of parliament and some ministers so disturbing. St. Maarten was not born under such favorable conditions, but it certainly needs to be committed to the rule of law.”

Pandt said that the government ought to consider downsizing, like other islands have done. He mentioned St. Thomas as an example. “The concept of big government is expensive to maintain and certain activities should be abandoned,” he said, without specifying which activities he has in mind. “Remember what old people used to say: don’t hang your hat where you can’t reach it.”

Pandt, who is a member of the financial supervisor Cft for the BES-islands and also a board member of GEBE’s shareholder foundation, said that the Cft plays an important role in proper budget management and good corporate governance “to avoid a meltdown like in Greece.”

Pandt also discussed the international financial crisis and pointed out that St. Maarten now has “acquired its sovereign debt of 26 million guilders.”

On the topic of utilities company GEBE, Pandt said that shareholders, private or public, “may not interfere with the day to day management of the company pursuant to the articles of law anchored in the Civil Code Book II and in the statues of the company.”

St. Maarten controls 92 percent of the shares in GEBE, while Statia holds 4.5 percent and Saba 3.5 percent. “The government cannot interfere with GEBE.”

Pandt pointed out that the GEBE facilities in Saba and Statia are operating at a loss. “a company must consider closing operations when they are not productive. Considering the government’s plans to establish separate NV’s on the smaller islands, Pandt said, “Making a company group with the design and operation comparable to hedge funds or equity funds will destroy GEBE and render electricity production difficult if not impossible.”

He added that the appointment of executive offices and management board “must take place under the rules of good corporate governance. Read the financials of companies like IBM or GM for a comparison with the practice in St. Maarten,” he said.

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