SHTA requesting status on TOT

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PHILIPSBURG - As a means to balance the 2011 budget, Finance Minister Hiro Shigemoto announced in December 2010 that the turnover tax (TOT) would be increased by two percentage points (from 3 % to 5%) effective February 11th 2011.

Shortly thereafter, the St. Maarten Chamber of Commerce and Industry publicly endorsed government's proposed turnover tax increase only as a temporary measure for one year.

The SHTA, on the other hand, condemned the move as a quick-fix method to balance the 2011 budget and suggested other ways to go about achieving a balanced budget.

Following the Chambers endorsement, the turnover tax was increased to 5%, with the understanding that it would not be a permanent measure.

This would give the ministry time to work on a new tax structure that was to be in place on January 1st 2012.

The SHTA was asked to make a presentation on its views for the new tax structure. This was done in March 2011, with promised follow up by members of the Working Group New Tax System.

To date, after repeated requests, SHTA has not received any update on the progress of the new tax structure.

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? 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.

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.

Last modified on Wednesday, 04 January 2012 20:11
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