Senior technocrats have one week to deliver new budget proposal

POSTED: 09/8/11 11:38 AM

GREAT BAY, St. Maarten – Both Prime Minister Sarah Wescot-Williams and Finance Minister Hiro Shigemoto have confirmed that the secretaries general in the seven ministries are to meet again on Thursday to “crunch the numbers” in the draft 2012 budget. Those talks follow a two hour discussion between the ministers, the secretaries general, the financial controllers at the ministries and senior civil servants during Tuesday’s meeting of the Council of Ministers.
The secretaries general have one week to do their technical reviews which are aimed at equalizing projected expenses and projected revenue. That review must consider the deadlines for submitting the budget and the recent annual report released by the Central Bank of Curacao of St. Maarten. That report and a letter sent to government has called for the administration to take several measures to grow the economy. The measures include reducing red tape, attracting investments, making public investments in infrastructure and revising the tax system.
Neither the prime minister nor the finance minister gave concrete dates for when the budget will be presented to in first instance the Board of financial supervision (Cft) and also to the various advisory bodies and then to Parliament.
“It is government’s intention to strive as hard as we can to definitely have a budget in by Parliament, discussed by Parliament before the end of the year. We believe that deadlines are important because it will serve no purpose and do not good if we were just able to come with the budget, when we think we’re ready with the budget. However I say this to remark that coming to a budget for Country St. Maarten 2012 is no easy task. In fact coming to a budget for any country is no easy task. So we, as a government, need to discuss the critical issues that are before us as we continue with the discussions for the Budget 2012,” Wescot-Williams said.
“The SGs have been advised to present realistic and executable policies based on the current income of the country. We are working to conclude the drafting of the national 2012 country within the shortest time possible and have it submitted to the relevant entities for review,” the finance minister said on Wednesday.

Ministerial discussions
While the civil service continues the technical discussions the finance minister announced that the Council of Ministers will have “key strategic discussions” on matters like the core tasks of government, prioritizing of policies for 2012, and steering the country’s economy in the right direction.
Raising revenue is of particular concern to meet expenses is being considered but both the prime minister and finance minister assert this is not the first option at this time and any suggestion to do would be a “long and hard discussion.” Ideas that have already been floated include creating a tiered road tax system and whether or not the government will implement part of the vision for the new tax system and begin the shift to indirect taxes.
“Two of the issues are the time – today’s economic situation – and the timing – what time do we need to implement or introduce whatever it may be,” Wescot-Williams said.
In order to guide the discussion and in effort to also collect owed funds the finance minister has called in the top management of the new Tax Organization to give an executive order to draw up a plan of action to go after revenues from businesses and/or individuals who are not paying any taxes or not paying their fair share.
“As a country, we need everybody to contribute towards the national development of the nation. Every business and individual has to pay their fair share and we are diligently working on this. Emphasis will also be placed on collecting existing outstanding taxes and government fees. Revamping of the tax system must also be taken into consideration as well which government is diligently working on that would lead to an improved economic and fiscal climate for the country,” the finance minister said.
The Minister is also working on a plan to work off all existing backlogs in appeals submitted to the tax office in order that the receiver can go over to collection. Management is expected to submit its plan by the end of next week. The plan is expected to consist of short term, middle term and long term actions which should lead to increased revenues for government coffers in 2012 and beyond. The strategy is part of the minister’s plan to tackle the informal economy as well as bring the so-called free-riders in to pay their fair share. In other words: increase compliance.
“We all know those businesses which refuse to give consumers receipts but offer a piece of paper from a calculator. We all have to pay our fair share in order for government to be able to execute the tasks it has to on behalf of the entire community,” Shigemoto pointed out in a release.
Discussions with the project leader of the new tax system has also been held in order to get the process of coming to a new tax system as a top priority and giving some considerations for research as well as guidance as to how important a simplified and user friendly system which is attractive for investors.
“The new tax system must also not be a strain on the economy, but contribute to the overall growth of the aforementioned. Due to global economic challenges in the United States and Europe, our national economy is currently basically at a standstill at best. A reformed tax system which this Government is avidly promoting to develop is a major policy initiative that is taking shape and will be a plus for our country,” Shigemoto wrote in his release.
“I must add that the revision of the tax system is top priority and is being treated as such. There are also other factors which affect our economy and which also need to be addressed. It should not be expected that a revised tax system on its own is the only fix-it-all solution to our economic stagnation. Fostering a favourable investment climate, investments in infrastructural development and managing our crime situation are, to name a few, the things that need to be tackled which government is working on. But it can only be done with all stakeholders collectively involved,” Shigemoto concluded.

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