Party for Progress (PFP) faction-leader Melissa Gumbs during the Inter-Parliamentary Kingdom Consultation IPKO in Bonaire (see related story) rightfully expressed reservations about certain restructuring measures in the so-called “country package” to be executed under supervision of the proposed Caribbean Body for Reform and Development COHO. She shared the sentiment that reforms should not be used as an excuse for the Dutch government to deny liquidity support and hold the islands hostage.
More details are needed on far-reaching steps to be taken and their socio-economic impact. Of particular concern is the planned implementation of a real estate tax and value added tax (VAT).
The former is an issue as a considerable number of families inherited land but never developed it, often because the exact ownership is not entirely clear and/or involves several persons. Moreover, lots of people built their own homes with help of relatives, neighbours and friends via a custom called “jollification,” in many cases starting small and adding on later, so that the assessed value of their property ends up being much greater than its actual cost.
Gumbs correctly argued that it remains critical to know whether the VAT is to come on top or instead of the current five per cent turnover tax. The latter is cumulative in nature and already a major factor in relatively high local consumer prices.
One does not need to be an expert to figure out that any significant increase of the fiscal burden in this unprecedented coronavirus-related crisis is ill-advised to say the least and could even prove counterproductive. After all, the current situation was fittingly described as “workers struggling from pay-cheque to pay-cheque” and “businesses desperately trying to keep their doors open.”
Most will agree that fiscal compliance in St. Maarten is too low, but the question can be asked whether those who correctly comply with their obligations to society won’t be made to pay for others who don’t, at the worst possible time.
