Unless it files an appeal, St. Maarten will have to pay BearingPoint and Noesis 1 million Netherlands Antillean guilders this week (see Friday/Saturday edition) for freezing a tax transformation project launched by the former government. The outcome could have been costlier, because the information communication technology (ICT) system upgrade these two companies were to handle was budgeted at NAf. 15 million and the entire plan at NAf. 60 million.
The relevant contracts were approved by Finance Minister Perry Geerlings’ cabinet director with his consent in November 2019, more than two months after the then United Democrats and St. Maarten Christian Party (UD/SMCP) coalition lost its majority in Parliament and the Council of Ministers took on a caretaker status. However, the latter had already decided to award a multi-year contract in April 2019, long before the governing crisis.
What saved the current Jacobs II Cabinet and particularly Finance Minister Ardwell Irion in this case is that no signed assignment agreement exists based on the request for proposal. The court thus ruled that ordering the country to comply with the ICT contracts would lead to nothing, but did find damages in order.
The entire affair again raises questions about policy changes after elections and their possible consequences. Had this been a bad deal to begin with or was the choice to pull the plug on such a purely political one?
While BearingPoint became the subject of some controversy over a similar project in Curaçao after that country’s present Finance Minister Javier Silvania (MFK) took office, Antigua and Barbuda seem happy with comparable work done there. The stated goal in St. Maarten at the time was to increase fiscal revenues from 21.5% of gross domestic product (GDP) to 23% in 2022 by enhancing compliance and it would be interesting to know to what extent that occurred anyway.
Last May a new tender was issued for an integrated Tax Management System of which the terms of reference differ significantly from those of 2019. Hopefully it will prove a success, but taxpayers are again left to wonder whether all this delay and legal dispute was really necessary, especially as they will probably end up footing the bill.
