Shigemoto: “Turnover Tax amendments will bring in additional income”

POSTED: 10/3/11 8:26 PM

St. Maarten – Finance Minister Hiro Shigemoto says amendments to the Turnover Tax (Turnover tax) Ordinance 1997 approved by Parliament on Friday covers some technical flaws and closes several loopholes.

“These amendments will also help to bring in additional income for the people of St. Maarten which benefits the country’s overall national development and allows government to make the necessary investments in education, health, crime prevention and social development,” Shigemoto said.

The changes, amongst other things, also clarify what happens to goods supplied and services rendered by foreign entrepreneurs to local buyers or clients.

“Only import of services by foreign entrepreneurs is taxed. Import of goods by foreign entrepreneurs is not taxed as we have no import duties. Whether it is from the French side or other international import of goods, no Turnover tax is to be paid for the import of those goods. Import of services, however, is subject to the five per cent Turnover tax,” Shigemoto said.

The law has also been softened so local entrepreneurs, who import services such as professional advice or other such services, can only be charged with Turnover tax that foreign importers of services didn’t declare and pay. It has also been softened to give local businesses the opportunity to make arrangements with the importers of services to pay the Turnover tax rather than run the risk of the Tax Office coming after them for the foreign entrepreneur not having paid the Turnover tax. The changes also encourages compliance by the foreign entrepreneurs and makes local entrepreneurs more aware of the fact that the foreign business have to pay Turnover tax on services which are being imported into St. Maarten.

“Basically, these changes are to create a more level playing field between local businesses and foreign entrepreneurs whereby now the import of services is also taxable for Turnover tax. Local entrepreneurs can only be charged when foreign entrepreneurs import services and they fail to declare and pay the Turnover tax,” Shigemoto said.

The amendments also sharpen the reverse procedure regarding the payment of taxes by the foreign entrepreneur and identify the period of taxation for the Turnover tax. Due to many past changes to the Turnover tax Ordinance, some references no longer correspond.

Shigemoto also reiterated Sunday that the Turnover tax is not to appear separately on the bills, but should be included in the price.

 

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Comments (1)

 

  1. Irv Cohen says:

    You deserve permanent recession if you forbid the business owner from identifying and itemizing the components of his price to the final consumer.