Shigemoto rejects majority of Pantophlet’s proposals

POSTED: 03/2/11 1:48 PM

St. Maarten – Finance Minister Hiro Shigemoto has responded to a letter from National Alliance MP George Pantophlet on Tuesday that was originally sent to Prime Minister Sarah Wescot-Williams. The February 16 letter contained proposals for balancing the 2011 budget and was discussed in the St. Maarten Council of Ministers before being delivered to Shigemoto’s cabinet on February 23.
In the reply Shigemoto said it would not be good corporate governance for the administration to demand that government owned companies pay dividends. The Minister also asserted that the companies have loans that need to be taken into consideration. Pantophlet had called for the Harbour Group of Companies, Princess Juliana International Airport and GEBE N.V. to pay dividends based on the fact that they, by extension, belong to the people of St. Maarten.
Shigemoto also rejected the idea of lowering the Turnover Tax back to three percent. According to the Minister doing so would create a 56 million guilder deficit in the budget and it is not in accordance with the principal of legal certainty. Keeping the amended law is also necessary for business convenience.
“Presently there is a new tax work group in place to develop a more simplified and transparent tax structure. It is expected to be in place in 2012. Along the way the work group will be looking at easy transitional improvements to existing tax laws which would pave the way to a more simplified and effective tax system,” Shigemoto wrote in the reply.
Though he’s willing to hear more on the MP’S idea of selling shares in the Harbour Group of Companies, the Juliana International Airport and GEBE N.V. Shigemoto believes it is not a structural solution for keeping the budget in balance and said the Board of financial supervision (Cft) “would not accept solving structural expenditures with incremental monies.”
“Moreover, it would not be recommended to sell shares of government owned companies to interested companies or persons because it can have an adverse effect. Once shares are sold, these interested companies or persons may acquire sufficient voting rights to change the organization structure of these companies and make changes with far reaching consequences. This can lead to measures such as downsizing of employees. Hence, the reason not to sell these shares,” Shigemoto said.
On the specific case of GEBE he said, “N.V. GEBE is owned by a foundation, which is owned by St. Maarten, Saba and St. Eustatius and not government.”
The Minister also revealed that he is already looking into whether money from government’s time deposits or fixed deposits could be used to balance the 2011 budget. The Cft has been asked to advice on that point and has not yet reported their findings.
The Minister’s referred Pantophlet to Article 10 of the Invorderingsverordening (Bovenwindse Eilanden) (AB 1970 No.3) as his response to a suggestion that government no seek to collect back taxes from before 2006.

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