SHTA wants tax plan but Chamber comfortable with waiting

POSTED: 01/4/12 12:12 PM

GREAT BAY / By Donellis Browne – The St. Maarten Hospitality and Trade Association (SHTA) has called for Finance Minister Hiro Shigemoto to “finalize and disclose” his plans for a new tax structure. The call comes after months of not hearing anything and no follow-up from the Working Group New Tax System since the body presented their vision on taxes in March 2011.

“SHTA is requesting clarification and an update on the new tax structure. It is crucial that the fiscal plans, which turnover tax is a part of, be finalized and disclosed to the population,” a press release issued by the SHTA’s Executive Director Valya Pantophlet stated.

Shigemoto has made the counterargument that the SHTA was not able to make time for a meeting he’d previously scheduled to provide an update. He’s also not pleased the statement did not mention the fact that he’s scheduled a new meeting for next week Wednesday (January 11) to provide updates and address the SHTA’s concerns.

“I am looking forward to the meeting where I can address any concerns of the SHTA and update them on matters related to tax reform which we have diligently been working on. Additional information with respect to this will be provided within short,” Shigemoto said.

The key question for the SHTA is the future of the turnover tax, which was raised from three percent to five percent in December 2010 as a budget balancing measure. The SHTA said then and maintains now that the increase was “a quick fix method to balance the budget”.

The body also points out that the lack of clarity over the new structure makes it difficult for them to plan and the public with questions on the government’s precise intentions.

“Recently, Minister Shigemoto announced that the 2012 budget will not be presented by the December 15th deadline but in the latter part of Jan 2012 or by March 1st 2012 at the latest; until such time the 2011 budget will be in use. In our opinion, this leaves the private sector -and in fact the entire population- with many unanswered questions: Is the TOT going back to 3% or finally being reduced to zero as it was a temporary measure to begin with? Is it going to stay at 5% or can we expect yet another increase,” a press release issued by the SHTA’s Executive Director Valya Pantophlet.

Further on the release also states, “As SHTA has stated numerous times in the past, not knowing what the new fiscal policy will entail, will cause more damage to the economy, investors sit on the fence and wait, business do not give raises or extend contracts, nor can they forecast their own budgets adequately.”

Chamber of Commerce

The St. Maarten Chamber of Commerce’s position, which is mentioned as endorser of the tax hike in the SHTA statement, is somewhat different. The interim President Glen Carty states that during a meeting in 2011 the minister had informed the Chamber that he we would be making announcements on the new structure in 2012 and that the turnover tax will remain at five percent. The minister also stressed during that meeting that he’d ensure that the new tax structure is submitted to the public for review.

“We therefore chose to give the minister the space to disclose the coming changes. What we also did was stress that the system must be revamped so none get away, the innocent don’t pay for the guilty and that the tax base is broadened,” Carty said Tuesday.

Carty could only take a position based on actions by the now interim board as a new executive board is due to be elected within short.

 

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