CFT Proposes Series of Strict Financial Measures
PHILIPSBURG- In the CFT's press briefing today July 7th, the chairman, Raymond Gradus gave a presentation on the financial and economic status of the island with recommendations for increased taxation and reduced expenses. The board is not pleased with the delays of the 2021 budget which had to be adopted in December of 2020 and the incomplete financial statements of the years 2018 to 2020.
As a result of the present financial situation the CFT proposed recommendations for cutting government expenditures and generating revenue. These include matching civil servants insurance premiums to that of private sector workers, increasing tax compliance and having politicians pay for their own health insurance and pension.
"Serious improvement in tax compliance and raising taxes on for example property or land is needed to bring the tax revenues to a much needed higher level" Gradus stated. He added tax reforms are needed to introduce budget surpluses in the near future. This is also part of the reforms St. Maarten agreed to in the country package which has also been set as conditions for liquidity payment. The fiscal reforms are: financial management, costs and effectiveness of the public sector, taxes, regulating the financial sector and economic reforms.
Gradus mentioned the need for St. Maarten to cut personnel costs which according to the International Monetary Fund (IMF) is higher than most Caribbean nations. This includes laying off civil servants. Of the various recommendations provided, taxing property and land is complex and potentially damaging because of the complicated nature of land ownership in St. Maarten. Gradus mentioned that St. Maarten has a land tax but it is not implemented. "A land tax is not that extortionary for the economy. Rich people with a lot of land, they should pay taxes so in that respect I think there is still a lot to gain."
Gradus emphasized everyone paying their fair share to alleviate the burden on those who are compliant. He added taxing the gambling industry and the need for data to assist with policy development and economic analysis.
