A letter from the Committee for Financial Supervision CFT to Finance Minister Ardwell Irion (see Monday paper) raised some concern. It appears the recovery of cruise and stayover tourism during the second half of 2021 was not visible in tax revenues that stayed at the level of the year before.
It should be stated that the latter part of 2020 also saw a temporary revival and last year started with a new wave of COVID-19, both influencing the annual figures. Nevertheless, the point about lack of fiscal compliance is well-taken.
Plans are already in progress to tackle this problem with the St. Maarten Audit Team, but a lot has to do with mentality. Too many are failing to contribute their lawful share to society, creating a constant budgetary shortfall and unlevel playing field in the business community, with all possible consequences.
CFT called for a rapid follow-up on recommendations by the International Monetary Fund (IMF) regarding the casino tax, raising government levies and duties on private imports including online purchases.
They also mentioned the introduction of generic medicines to reduce healthcare expenses and particularly those of Social and Health Insurances SZV. The latter will even be given the authority to select a “preferred supplier” for pharmaceuticals, it was recently announced by the Ministry of Public Health, Social Development and Labor VSA.
As employees earning up to 120,000 Netherlands Antillean guilders will soon fall under SZV’s coverage, the question can be asked whether concentrating so much power at one public sector institution is wise in the long run. In any case, the impact on free competition, current stakeholders in the field and their employees must be carefully weighed too.
The same goes for measures that increase the tax burden, especially as it is clearly not carried fairly by everyone. The cost of living already increased substantially due to the pandemic’s effects on production and shipping, while energy prices have soared.
These things can only be expected to get worse with war in Europe and related sanctions, so structural reforms – as necessary as they may be – must at this time of continued crisis be approached with abundant caution.
