MP Emmanuel: Tax exemptions for the privileged unfair and sacrifices revenue | SOUALIGA NEWSDAY

SINT MAARTEN (PHILIPSBURG) - Exempting the World Bank, its personnel and activities from taxes should not just be about following an international treaty, but should be viewed from the perspective of what this would cost the country and against a backdrop of why you are not doing similar for the people of St. Maarten. So says Independent MP Christophe Emmanuel in his critique of the proposal of Minister of Finance Ardwell Irion to exempt the World Bank from several local taxes.

MP Emmanuel stressed that once again the Minister of Finance has appeared before the Parliament of St. Maarten to sell to the public an idea that does not take the realities of St. Maarten into account and completely void of any research. The Minister, Emmanuel said, has a habit of pushing actions and activities onto St. Maarten simply because they are in effect in other places around the world, counting on his majority support in Parliament to push these initiatives through.

He explained that Minister Irion wants to exempt the World Bank, its office activities and personnel from so-called double taxation on St. Maarten and in the home country of diplomats since they report their income to tax authorities in those countries. Also, “using the crutch” that even the Netherlands are part of international treaties in which such instances are outlined.

“The Minister painted a picture as if this is the only option the St. Maarten has when it comes to taxation of such an entity. What the Minister did not say or perhaps purposely left out, is the fact that entities such as the World Bank and IMF also has provisions in place to reimburse its personnel, consultants and contractors with whatever taxes is assessed and applied in any given country,” Emmanuel explained.

“Had the Minister done any real research as he likes to advise others to do, he would discover that the World Bank and IMF since 2005, officially announced their willingness to reimburse if, among other things, the loss of tax revenue has damaging affects to a country such as St. Maarten that is already struggling to collect enough tax revenue,” he said. MP Emmanuel also questioned if the Minister tabled other alternatives “or did he simply say ok to the World Bank like he did to the Dutch before cutting the income and benefits of workers.”

Emmanuel pointed out that the Minister of Finance has yet to indicate how large a workforce the World Bank will employ here, for how long, how many tax-exempt activities the World Bank wants to execute and so on. “Against this backdrop, tax exemptions directly hamper St. Maarten’s capacity to generate tax revenue. The Minister has to explain to the public what the estimated tax revenue shortfall will be for St. Maarten,” Emmanuel said.

He added that beyond the resulting loss of revenue, granting the World Bank exemptions will encourage further development of a governance culture of exemptions for the privileged. It will incentivize claims for exemptions and it runs counter to the main objective of the tax system reforms the same Minister has been touting, namely, fair and efficient application of tax law.

“The senior citizen and others on St. Maarten for example, will have every right to claim exemption. This is the saddest and most disheartening thing to me. We can easily give exemptions to people and diplomats making so much money, but we can’t exempt the pensions of our seniors,” Emmanuel said.

He continued: “We can’t exempt civil servants and semi-governments sector workers from cuts to their income and benefits. We couldn’t find a way to not implement the 12.5% cuts. We barely have revenue to do anything, we are always on our knees to the Dutch. But here comes the Minister of Finance wanting to deprive the country of revenue with tax exemptions for the privileged.”

The MP also lamented that supporting MP’s of the UP/National Alliance coalition dismissed questions about the exemptions with a casual explanation that exemptions occurs all over the world. “What this type of attitude re-enforces is the complete disconnect that this government has with realities on the ground and with the people of St. Maarten. It is insulting, that you would table something like this without thinking about how unfair this would be to your people whose pensions you are taxing, whose small businesses you are auditing, and how it will affect much needed revenue for the country,” Emmanuel concluded.