PHILIPSBURG--The St. Maarten Hospitality and Trade Association (SHTA) said over the weekend that the Inspectorate of Taxes had created more confusion with its "attempted clarification" on the changes in the turnover tax (ToT) ordinance and called on Minister of Finance Hiro Shigemoto to have the changes published as he had said he would.
The SHTA said it "understands that the Inspectorate of Taxes has sent out brochures" in which it attempts to give clarification" and also has learnt that the Inspectorate has tried to clarify the SHTA's interpretation of the law.
The SHTA said the brochures from the Inspectorate stated the following:
"Q. According to the SHTA, the new Article 5 implies that imported goods are now subject to ToT, establishing a five per cent import duty for resident companies, resulting in an additional layer of taxation. Is this true? No. The new Article 5, section 3 only states that non-resident entrepreneurs that deliver goods and provide services to resident buyers are deemed to be domiciled at the Inspectorate of the Tax Department.
"This is to ensure that non-resident entrepreneurs, when they are subjected to the ToT, are known to and registered at the Tax Department. This doesn't mean that the scope of the ToT, which is governed in Article 2, has changed. Article 2, section b clearly states that only when non-resident entrepreneurs deliver goods and/or provide services to resident buyers within the jurisdiction of St. Maarten, they are subject to ToT.
"When goods are imported, the delivery (transport) takes place outside the jurisdiction of St. Maarten and is therefore not taxed. In conclusion, ToT is not imposed on import of goods."
According to the SHTA, the explanation provided by the Inspectorate is incorrect and therefore has created even more confusion with no correction published, as the Minister "promised" in a press statement on January 10.
At that time the Minister said: "There is indeed an omission in the ordinance, but that will be solved via what is known as a 'reparatiewet' or corrective law. Even if this reparatiewet was not done, which it will be done, even in such a situation the current law would not have led to the undesired situation as presented by the SHTA in its explanation in a letter to the ombudsman."
Furthermore, the SHTA believes the additional expense for the entire system ? not just businesses, but the Inspectorate and Receiver as well ? could have been avoided by not implementing a tax change in the middle of a month. The additional work for the Tax Inspectorate and businesses is not just poor planning, but wasteful of limited resources.
"The SHTA is hereby requesting that the corrections be made and published on government's official Website
www.sintmaartengov.org and is calling on the Ministry of Finance or the Inspectorate of Taxes to organise or facilitate the organisation of an informative session for the business community to clear up the confusion regarding the ToT adjustment," the SHTA concluded.
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