CFT mounting Pressure on SXM Gov. to raise tax compliance
The Committee for Financial Supervision CFT is Urging the St. Maarten Government to improve on compliance by implementing the tax reforms as they were advised by the International Monetary Fund (IMF). A lot have been said about how well St. Maarten is recovering with cruise and stay over tourism but it is not showing in revenues.
St Maarten pointed to the recovery of tourism especially for the second part of 2021 to prove that the economy is bouncing back and The CFT was expecting an increase in the income of the country for 2021 but the figures showed that the realization of tax revenues is the same as 2020. That’s according to a letter sent by the CFT to Finance Minister Irion. A comparison was also made to 2019 by the CFT that found the taxable income of government for 2021 was significantly lower than that of 2019, when considering the economic recovery boasted by the St. Maarten government.
The CFT states that this is a worrisome scenario for St. Maarten especially knowing that St. Maarten does not generate sufficiently to cover their annual expenditures and create even a surplus. Therefore it is important for St. Maarten to follow up on the recommendations offered in the IMF report regarding Tax Reforms that would increase compliance.
Further to the CFT observations, The cost of Government personnel was seven Million Guilders higher in 2021 that was budgeted; this is strange says the CFT in light of the implementation of cuts to benefits of the civil servants that must be explained. The CFT continued that St. Maarten for the entire year 2021 budgeted NAF. 123 million in Expenditures for COVID-19 measures. This ended on October 01, 2021. The fourth execution report showed that St. Maarten reserved NAF. 52 million in 2021 for COVID-19 support measures; NAF 31 million of which was for wage subsidy regulation. That subsidy was closed in December 2021.
The CFT reminded the Government that the audit of wage subsidy through an assessment of the factual turnover, losses and factual payment of employees has not yet been completed. Minister Irion was reminded that when this is concluded for 2020 and 2021, a start must be made to retrieve excess amount of wage subsidy paid to businesses, and urged the Minister to keep working on improving St. Maarten’s financial management.