PHILIPSBURG:--- Former Member of Parliament Rolando Brison has unveiled a new tax proposal designed to provide much-needed relief and incentives for both businesses and individuals in St. Maarten. Recognizing the immense challenges faced by our residents in the wake of Hurricane Irma and the COVID-19 pandemic, Brison's plan aims to foster resilience and sustainability within the community.
International research (OECD, 2019) demonstrates that the likelihood of recovering tax debts reduces over time. A similar investigation on our sister island Curacao came to the same conclusion: 50% of income is collected in 2 years after imposing an assessment and 90% of income is collected in 5 years. This shows that the income after 5 years is marginal. In addition; collection of assessments older than 5 years requires a greater capacity than collection of assessments younger than 5 years.
“In order to bring the collection files at the Receivers Office to a manageable level and to also provide the whole Tax Department with the opportunity to work in the present, an adjustment should be made to the collection policy of the Tax Receiver”, Brison said.
Brison proposes a "Start Fresh Tax Cleanup," which means that tax debts that are more than five years old will no longer be actively collected. Tax assessments older than five years will only still be collected in the following cases:
(i) if they have been imposed as a result of a criminal tax investigation;
(ii) if the tax debt amounts to NAf. 1 million or more and the Tax Department has information indicating that there are recovery possibilities or
(iii) if the tax debt has already been paid into a third-party account (such as with a notary).
“This adjustment of the collection policy also contributes to the reduction of the large inventory of unhandled objection letters”.
“For the people within the community that will argue that this is just an empty promise to gather votes, I would like to point out that this change in policy of the Receiver can be easily made and was also done on our sister island Curacao”.
Brison furthermore explained that he would also like to extend the maximum period for tax payment plans from nine months to two years. “Nine months is not a realistic timeframe for small businesses and many residents to settle their tax debts, especially those still recovering from recent economic disruptions. Extending this period will allow businesses to manage their finances more effectively while ensuring the government still collects its due taxes,” Brison stated.
Brison also advocates for dedicating at least 2% of the national budget to support small and medium enterprises (SMEs). This allocation would provide grants for startups, as well as funding for training and professional services. “If we allocate 2% of the national budget, we could potentially channel between eight to twelve million guilders annually into the SME sector. This could, for instance, provide 100 new businesses with startup funds of 120,000 guilders each,” he highlighted.
Brison emphasized the importance of government support in ensuring the survival and growth of small businesses. “We are a resilient country and a resilient people, but the government needs to offer opportunities and relief to our citizens. By implementing these measures, we can ensure that our people not only survive but thrive, contributing to the overall economic health of St. Maarten.”
