St. Maarten Ministries sweat on 2015 budget

POSTED: 06/1/14 11:37 PM

Plans still 44 million guilders too ambitious

St. Maarten – The 2015 budget will be at most 1 percent higher than this year’s budget, finance Minister Martin Hassink said on Wednesday at the weekly Council of Ministers press briefing. This means that projected income will be around 431 million guilders. Currently, the seven ministries have plans on their minds for 475 million guilders, and they will all have to downsize them by 44 million so that their 2015 program fits within the budget.

“The 2014 budget was cut to the bone,” Hassink said. “As the numbers show, certain things need to be done this summer to balance the 2015 budget.”

The finance ministry is busy to complete the new budget before the September 1 deadline. Ironically, this deadline falls on the Monday after the August 29 elections. “There is still a lot to be done to balance it, but we are trying to reach the goal of meeting that deadline,” Hassink said. “The budget projections of all ministries are currently higher than what we will be able to cover with income, so they all have to look at cost savings and increasing income.”

Minister Hassink said that he has engaged the government accountant bureau Soab in a project for income generating and cost saving measures.

The minister emphasized that increasing the turnover tax – currently 5 percent – is not part of the plans for next year, but increased taxes on alcohol and tobacco are still on the table.

The numbers for the first quarter of this year are looking good, “with some reservations,” Hassink said. Income is 10 million guilders higher, though expenses are also 2 million guilders higher than in the first quarter of 2013. However, these numbers are in line with the 2014 budget.

Revenue from wage and turnover taxes is about the same as last year, but the government collected more in profit and road tax.

“The development of government income has our full attention,” the minister said. “Due to the higher income our liquidity position has improved but not enough to be comfortable. Structural financial reform is needed to balance the budget.” The minister pointed out that most tax revenue comes in during the first quarter and that it is now opportune to build up reserves for the rest of the year.

During the first four months, the government collected 131.7 million guilders (about $73.5 million) in taxes – about 30.8 percent of the projected annual revenue for 2014 and enough to cover the government’s expenditures for approximately 4.5 months. Profit tax yielded 20.6 million guilders, wage tax 47 million, turnover tax 55.7 million and road tax 8.4 million. Hassink said that practically all the road taxes have been collected. The projected total for 2014 is 9 million guilders.

 

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