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5M euros to be raised by new tax measures on St. Maarten

FRIDAY 1 JUNI 2012,

~ As Territorial Council takes decisive action ~

MARIGOT–Tax measures to be introduced by the Collectivité, some with immediate effect, approved at Thursday’s Territorial Council meeting will generate around five million euros a year to help shore up the ailing financial situation.

President Alain Richardson indicated at his first press conference weeks ago that the Collectivité urgently needed to find 30 million euros to get through the year and that new tax measures would have to be introduced.

Among the measures approved by the majority at Thursday’s Territorial Council meeting was an increase in the Capital Gains Tax to five per cent on real estate. The Registration Tax when properties are sold also has been increased from six to eight per cent.

The rate for the Taxe Général sur le Chiffre d’Affairs (TGCA) remains at two per cent except for telecommunications services and electricity for which the rate has been increased to four per cent. Richardson said it would not be appropriate for an across-the-board increase that would penalise the majority of the population, many of whom are going through difficulties.

“It’s important to take these measures because we know that when the Budget is voted on June 12 it will show a substantial deficit,” he stated. “The Territorial Accounting Chamber … has recommended a doubling of the TGCA across the board. To prevent this possible penalisation we took the initiative to add the two per cent on the other specific services,” he explained.

Another tax to be introduced is on airline and ferry tickets. Travellers will pay an additional 10 euros on tickets. However, the tax will not be added for tickets where travel is for less than 50 kilometres. This tax will contribute by the end of the year to purchasing the property to facilitate the 200- to 300-metre extension of the runway at Grand Case Airport and accompanying road infrastructure.

A motion also was passed during the meeting calling for the State to assume its responsibilities.

“We have taken courageous and responsible tax measures that are not popular, but we are not waiting for the Accounting Chamber or other audits to make their recommendations,” Richardson said. “We are in a better position now, for example to demand a renegotiation of the compensation for the Transfer of Competences, or requesting financial assistance in the form of grants or loans, or requesting a complete review of how the tax services carry out their work; i.e., the way they collect tax.”

Richardson said the taxes to be implemented were not taxes that waited on assessment, but were collected and paid to Government the following month.

Opposition Leader Daniel Gibbs objected in principle to the tax measures and called for a 100-day delay to thoroughly review taxes to see what could be changed or added, but Richardson rejected the proposal arguing that the situation was too urgent to wait.

Other agenda points included the nomination of the representatives to the Commission Administrative Paritaire and the Comite Technique Paritaire. New statutes for the Caisse Territorial des Oeuvres Scolaires (CTOS) also were adopted.

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