A shift from direct to indirect taxes (see related story) is being propagated at a global level already for many years. The latter are considered easier to collect and fairer since the amount paid depends on what is consumed. To some extent that is already the case for St. Maarten’s turnover tax, because businesses may pass it on in their prices.
This so-called TOT has been called destructive by many, also because of its cumulative effect when products are imported, distributed and retailed by different companies that must each pay it based on their individual monthly revenues. But without such, government would most likely not earn enough money to fund its operations especially after taking over formerly federal tasks when the Netherlands Antilles was dismantled per 10-10-10.
Fact remains that the TOT seems to be effective, as does wage tax, while this is apparently much less the case for profit and income tax. As a matter of fact, a long-running joke in the private sector is that making a profit means having a bad bookkeeper or accountant.
That is not so funny and perhaps indicative of an asocial mentality that leads to a notorious lack of fiscal compliance. Sales or spending taxes are much harder to evade, which is obviously a benefit.
However, great care must be taken not to increase the financial burden for law-abiding employers and citizens who do meet their civic responsibility. Particularly under the current unprecedented coronavirus-related circumstances on top of the still-felt impact of devastating Hurricane Irma, it is probably best not to cause any major economic shock that could have an adverse result and even prove counterproductive.
In times of crisis and great uncertainty conventional wisdom says to avoid rocking the boat.
