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CFT suggest dividends policy, hails improved tax system St. Maarten

THURSDAY, 19 JANUARY 2012

PHILIPSBURG–The Committee for Financial Supervision CFT welcomes government’s ongoing efforts to strengthen the tax system and has “hinted” at the need for a stringent dividends policy for government-owned companies.

CFT Chairman Age Bakker told the press on Wednesday in the committee’s newly-opened office in the Convent Building on Front Street that the government was “taking steps to significantly strengthen the tax system and the tax authorities.”

Bakker added that increases in government’s income would be needed in the coming years to achieve the provision and service levels residents deserved and expected. The increases also are needed to cover the multi-annual financial risks.

Also in discussions with government, Bakker said the CFT board, on which the country is represented by attorney Richard Gibson Sr., “hinted that it might be advisable to consider drawing up a dividends policy for government corporations.” Such a policy would “promote a more comprehensive assessment of all public funds. It would also enable Parliament to ultimately balance how government’s revenues should be allocated.”
CFT has suggested that government look at the pros and cons of establishing such a policy, like other countries. Finance Minister Hiro Shigemoto had said already last year that government was working on such a policy.

Government-owned companies operate at present under concession fee arrangements with government. “We [CFT] think it is advisable to be clear.” Government is said to have taken note of the CFT comments, Bakker said, adding that CFT certainly would follow up on this during the next visit.

CFT and government have developed a five-year road map in connection with the Public Expenditure Framework Assessment (PEFA) that will lead to stronger financial management and eventually bring the country’s management up to an internationally acceptable level. “That will also help and enable institutions like Parliament to fulfil their role.”

The roadmap outlines major priority areas for government to tackle and improve for the long-term benefit of better financial management. St. Maarten in general is a young country that has to build up its institutions. “So we have to be realistic. We have to accept this. We have to be, on the one hand, ambitious in what we try to achieve, but at the same time be realistic about what can be done,” Bakker said.

Also present at the press conference were CFT Secretary Kees van Nieuwamerongen and CFT board members Albert Romero (Curaçao) and Richard Gibson Sr. (St. Maarten).

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