WILLEMSTAD--The Committee for Financial Supervision CFT has expressed its concerns about the soundness of the income estimate in St. Maarten's 2012 budget, in particular government's plan to collect come NAf. 48 million in back rental tax owed by non-resident condo owners.
Calling it "an important revenue-increasing measure for 2012," CFT stated that while it welcomed this type of initiative to increase income, it also foresaw risks with regard to the practicability of such a measure.
For this year, the CFT will utilise "a concrete time planning" drawn up by St. Maarten to monitor this measure. If it appears during the year that the projected revenue will not be realised, CFT will see to it that "adequate measures will be taken to maintain the budget in balance."
Members of Parliament (MPs) had also queried government's ability to collect the NAf. 48 million, during the meeting of the Central Committee of Parliament on February 22.
Democratic Party (DP) MP Leroy de Weever, a member of the United People's (UP) party/DP coalition, said he could not comprehend that some 10 per cent of the budget, at a time of no economic growth, was tagged to a "new tax" on real estate, referring to government's move to have condo owners pay up for renting out their condos. "How can we include this realistically as earnings?" he asked.
National Alliance (NA) MP George Pantophlet also wanted to know how government intended to tax the condos.
Independent MP Frans Richardson pointed out that while the CFT had given a cautiously positive advice on the budget, it also had concerns about the NAf. 48 million to be raised from foreign condo owners.
MP William Marlin (NA) said government needed to explain how it realistically intended to collect NAf. 48 million from condo owners and whether the possibility of tax assessments being appealed and the time this could drag on had been taken into consideration.
Answering these questions, Finance Minister Hiro Shigemoto had told Parliament this "income tax" was based on the number of non-resident condo owners, the average rental income in high and low season, and percentage of tax, among other items, based on a survey held in 2011.
Based on the calculation, the ministry said it anticipated an amount of income tax at NAf. 9.7 million yearly. Going back five years, this means a maximum amount of NAf. 48.5 million is owed. In the budget, "a conservative amount" is taken into account: NAf. 21 million.
Persons residing outside of the country who derive income from immovable properties here are subjected to tax in St. Maarten, the minister explained. Whether or not these people are paying tax in their country of residence is not relevant for the enforcement of St. Maarten's domestic tax law.
Niclas Alexandersson Mark Bright Robert Schumann Dorset Internet Luis Moreno-Ocampo
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