President Richardson: We are on the right track” Collectivité tackles tax compliance

POSTED: 02/13/13 12:42 PM

MARIGOT, St. Martin – Finance Minister Roland Tuitt is not the only one to address tax compliance. Alain Richardson, like Tuitt a certified public accountant, and nowadays the President of the Collectivité d’Outre Mer de Saint Martin (COM) is battling with the same issue.

The February-issue of the Collectivité-magazine Point.Com describes six measures the government had in store to improve tax compliance. First of all, the COM wants to identify all businesses that are active on the French side this year. Another measure is large-scale controls on the payment of license fees, business taxes and the TGCA (La taxe générale sur le chiffre d’affaires – the turnover tax). The action plan to combat tax fraud furthermore includes a commitment to auditing accounts, the systematic control of files with high stakes in terms if income tax, the use of social data declared by enterprises for the purpose of cross-checking and the identification through the use of aerial photos of premises that are not taxed for property tax.

The Collectivité’s financial difficulties threatened its solvency and it became necessary to look for new tax revenue, President Richardson says in an interview with Point.Com. “It is in this context that the new majority has chosen fiscal levers that allow for the participation of everyone, while still guaranteeing fair taxation.”

Richardson said that the COM had decided to leave the turnover tax in the trade sector untouched, “in order not to penalize the territory in relation to Sint Maarten and especially not to impact the food budget of the neediest families.”

So instead, the government increased the turnover tax for the services sector from 2 to 4 percent. This measure will affect the bills of accountants, lawyers, notaries, consultancy firms, real estate agencies, construction work, furnished property rentals and rental pleasure vessels, garages, and employment agencies. The tax for electricity, telecommunication and radio and television broadcasting services remain 4 percent.

Richardson says in the interview that currently only 800 companies on the French side are paying turnover tax. The COM will provide additional officers to help the tax administration get its house in order.

“Economic, taxation and social questions lie at the heart of my profession as a chartered accountant,” Richardson says in the interview. “The experience I gained was essential to manage the budget problem we inherited, to decide the best way to generate revenue and to protect the interest of the Collectivité.”

Richardson said that the tax burden on the island will remain lighter than in mainland France and that the island is on the right track. “Confidence has been restored, the Collectivité is able to repay its debts and the focus in 2013 will be on economic development.”

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