TUESDAY, 12 JUNE 2012
PHILIPSBURG–Finance Minister Roland Tuitt was back in the Central Committee of Parliament to answer a barrage of questions from Members of Parliament (MPs) about the tax reform project that was led by United Kingdom-based Taxand Group and its links to local consultants working for the Finance Ministry.
Tuitt reiterated a number of points he had raised when the meeting started a week ago about the background of Taxand, a company selected by former Finance Minister Hiro Shigemoto to carry out the tax project.
The contract between Taxand and government was never signed, but payments totalling NAf. 4.7 million for work carried out had been paid to the company under the former government. Tuitt has put the payment of invoices totalling NAf. 5.5 million on hold pending an investigation into the procedure used to select the firm.
MPs were still enraged about the price tag of the project – some US $11 million. Several pointed out that the money could have been spent better on community projects for the youth and to repair roads.
Tuitt supplied Parliament with the draft tax structure put together by Taxand with a request not to share or publish the information. He said Shigemoto had “caused damage already” because he had made part of the plan public. “It’s like going to war and giving the people who you are going to war with your strategy.”
As for the tax compliance project being carried out by Taxand via its subsidiaries, Tuitt said the 15 per cent incentive fee on collections would have had to be paid in the US dollar equivalent to the UK pound sterling. The currency risk, based on the unsigned contract, would have rested with government.
Speaking about the 2012 budget, Tuitt said he was busy with budget amendments that would cover the payment of the cost of living adjustment (COLA) to civil servants and others. He hopes to bring these to Parliament before the end of June, as the three-week period granted by the Committee for Financial Supervision CFT ends on Wednesday. He is looking at paying the COLA in July, while vacation allowance and other adjustments will be paid this month to prevent civil servants being hit with hefty tax deductions from their salaries.
Tuitt said he also would review the levying of income tax on non-residents who rent their condos. This budget item was expected to bring in some NAf. 21 million, but estimates now show that the most that can be collected is about NAf. 600,000. Also to be reviewed is whether reaching back five years to collect this tax is feasible. The minister has meetings with people in the real estate field and has learnt that this attempt to collect taxes is “having a devastating negative effect on the industry.”
Several other pending projects from the former government also have been put on hold, including the American football cheer-leading programme with a price tag of US $310,000 and hosting of the wedding of two US celebrities with a reality show spin-off (US $95,000).
Based on the pending annual accounts it appears as though 2009 had a deficit, while 2010 and 2011 are showing surpluses. Tuitt will answer in writing a number of other questions posed by MPs on the Taxand project and the budget in the coming days.