Shigemoto broke all the rules in the book with Taxand deal

POSTED: 06/5/12 12:06 PM

Finance Minister Roland Tuitt and MP Patrick Illidge speak ahead of the start of Monday’s Central Committee meeting. (Leo Brown photo)

Minister Tuitt: no tender, no signed contract

St. Maarten – Former Finance Minister Hiro Shigemoto broke all the rules in the book when he entered into a deal with tax consultancy Taxand for a contract worth between $11 and $14 million that included a clause that would entitle Taxand to 15 percent of the additional revenue its handiwork would generate for the Government of St. Maarten. This sums up the findings the new Finance Minister Roland Tuitt presented in a brief overview in the Central Committee yesterday evening.
“You cannot circumvent the rules, even if you have the okay from the Council of Ministers,” Tuitt said.

In his first appearance in a central committee meeting, the minister surprised MPs with a concise overview of his findings about the Taxand case during his first week in office.
“The normal procedures were not followed,” Tuitt concluded.
“When you are going into a large project like this you need to have terms of reference; they establish the requirements the contract party will have to meet.”
But the Finance Ministry did not formulate these terms of reference for the project to modernize St. Maarten’s tax system. The audit ordinance stipulates that projects worth more than 50, 000 guilders require a public tender, but this was not done either. Tuitt said that there was also no tender by invitation.
“For such a procedure you invite parties to submit a bid, but that must be done based on the terms of reference and they did not exist.”
Also, the Finance Minister added, the expenditures for the project were not budgeted. Above the $11 to $14 million contract price, Taxand expected to be compensated for out of pocket expenses like air fare, car rental and hotel costs. The Finance Ministry paid $290, 000 to the company every two weeks.
“Was a contract signed for this project? No,” Tuitt said.
“Taxand signed the contract but the former Finance Minister did not sign it. He gave Taxand the opportunity to work on an incentive basis. They would get 15 percent of the extra income their measures would generate. That is already a problem because how are you going to measure that?”

Lastly, Minister Tuitt said, the Finance Ministry needed a national decree signed by the governor to justify the payments that were made to Taxand.
“Was there such a decree? No,” Tuitt said.
All in all the finance ministry paid 4.7 million guilders to Taxand before the project was halted. A second payment of 5.4 million guilders was stopped by the new government.
Tuitt said that he has asked the government accountant bureau (Soab) for a bid to investigate the Taxand case. One of the questions such an investigation must answer is whether the payments the Finance Ministry made to Taxand were justified based on the product the company delivered. The ministry also asked legal advice about the consequences for stopping the proceedings with Taxand.

Did you like this? Share it:
Shigemoto broke all the rules in the book with Taxand deal by

Comments are closed.