CFT approves draft budget amendments

~ ‘We got a clean bill … came out shining,’ says Tuitt ~

PHILIPSBURG--The draft amendments to cover the some NAf. 38 million deficit in the 2012 budget have been approved by the Committee for Financial Supervision CFT and “no other stipulations” have been made on the changes, Finance Minister Roland Tuitt said Wednesday.

He told the press the CFT had requested only additional information on a number of items not attached or related to the budget amendments. The amendments still have to be approved by Parliament by the end of the month to make it possible to pay out the NAf. 17 million cost-of-living adjustment (COLA) for/to civil servants.

“We got a clean bill from CFT. … This government went into the process with CFT and came out shining,” said Tuitt, a former CFT board member.

Covering the budget deficit are the more than NAf. 2.6 million collected so far in gasoline excise tax, NAf. 5 million in wage tax, and NAf. 1 million by the Court of Justice. Those increased amounts together with the already-announced additional amount of NAf. 17 million collected in Turnover Tax (ToT) will assist in keeping the budget at NAf. 432.5 million.

Removed from the budget are NAf. 1 million each for Succession Tax, as requested in a motion passed by Parliament; profit tax; and transfer tax.

Another contributing factor to keeping the budget balanced is the determination that the NAf. 7.1 million earmarked for the execution of the Plan of Approach for the Justice Minister can be reduced to NAf. 3.1 million. These are some of the adjustments made.

The total operating expenses for 2012 are budgeted at NAf. 432.5 million, an increase of NAf. 11.6 million or 2.8 per cent, compared to 2011.

The CFT asked for more information about the plan of approach for the strengthening of the tax office. Some six people will be hired for the department to boost efficiency and fill vacancies.

Compliance with the Public Expenditure and Financial Accountability (PEFA) specifications was another area about which CFT wanted information. Tuitt said the country’s last evaluation for the some 28 International Monetary Fund (IMF) indicators “was nothing to boast about.”

Because of that evaluation, government has developed a five-point financial plan to help the country “get at least a ‘B’” at the next check-up. That plan has been submitted to CFT for review.

Government also has to focus on re-regulation of social premiums, specifically pension, Tuitt said. A report on the pension situation has been compiled and shared with CFT.

“We have to deal with the age issue,” the minister said, adding that a move from pension age of 60 to 65 was necessary to continue to make the pension fund viable. Another change on the pension front will be a change from the calculation of a pension of 70 per cent of the worker’s last salary to a middle or median calculation of the salary prior to the last one.

These two changes would allow the payments “to become more manageable” for the pension fund to pay out. Focus also will be placed on ensuring more people are paying into the pension fund than receiving benefits.

The country’s pensioners group is still small, so measures have to be taken to make sure the group does not become too large, the minister said.

CFT has also requested the financial statements of 2009 and 2010. These will be shared.

Source: http://www.thedailyherald.com/islands/1-islands-news/29617-cft-approves-draft-budget-amendments.html

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