Divico: Turnover Tax should be replaced by import tax for distributors | THE DAILY HERALD

Divico’s location in Cole Bay being prepared for reopening soon.


~ Says its prices not up anywhere near double digits ~

PHILIPSBURG–Wholesaler Divico says its prices have not hiked anywhere near double digits over the 2012 to 2017 period as was suggested was the case with wholesalers in a three-year-old report. Divico is calling on authorities to cancel Turnover Tax (ToT) for distributors, as this double taxation affects prices, and replace it with an import tax similar to the Caribbean Netherlands.

  Food wholesalers in St. Maarten were recently accused of manipulating the cost prices of items before they are brought into the country, hence driving up the cost of food. The allegations were made during a meeting of Parliament’s Tourism, Economic Affairs, Transport and Telecommunication (TEATT) Committee, in which a report on the study of price developments and logistics in Aruba, Curaçao and St. Maarten from Ecorys, an economic research and consulting company in Europe, was discussed.

  Asked to comment on the allegations, Divico Managing Director Sunny Khatnani said while he had not read the report even though he had received it, Divico’s prices were not increased anywhere close to double digits. Major wholesaler Prime Distributors was also asked to comment on the allegations and The Daily Herald is awaiting their response.

  “I have not read or seen details of what categories were reviewed by Ecorys nor what happened to overall prices between 2012 and 2017,” Khatnani said.

  “As far as Divico is concerned, I know Divico’s prices did not go up anywhere close to double digits over this five-year period mentioned. Our selling prices are reviewed and monitored by our vendors that we represent and price value chains analysis are done constantly in order to gain market share for the brands we exclusively represent,” the Divico official added.

  “I lost my entire company due to Hurricane Irma in 2017 and then again in a fire in February 2019 only to be affected again in March 2020 due to COVID-19. Although Divico was a major wholesaler in 2017, Divico still has quite a bit of work to regain our complete infrastructure, our sales, and recover our losses of the past three years. Much has changed since 2017 and competition is fierce today. Even fiercer than in 2017 or before.

  “There are also many non-registered companies importing and operating on the island and not paying any taxes. This can simply be resolved if their CRIB numbers are tied to the bill of ladings of every shipment coming to St. Maarten. Government needs to cancel ToT for distributors as this double taxation affects increased prices. Government needs to replace this ToT with import tax same as the Caribbean Netherlands islands as has been recommended by SER [Social Economic Council] in their many reports.”

  He said these solutions will increase tax income and also alleviate concerns about pricing and government will have direct access to review all matters that are important to them by looking at the actual numbers of today and tomorrow and not yesterday or 2017.

  According to members of parliament, the Ecorys report suggests that the cost of food items in St. Maarten went up by 53 per cent from 2012 to 2017, while factors that would normally drive up food prices were not contributory factors for the price hikes.

  During the recent meeting of Parliament on this issue, United People’s(UP) party MP Grisha Heyliger-Marten called the main conclusion of the report alarming. It indicated that the country has a serious issue with the development of food prices. She said contrary to popular belief transportation cost plays a very small role in the overall retail price in St. Maarten. While a 20-foot container costs US $1,500 from Miami to St. Maarten, for example, it costs US $3,000 from Miami to Curacao.

  National Alliance (NA) MP William Marlin said during the meeting that the issue of pricing has to be tackled at the source because wholesalers in the country are believed to be fixing the prices before the products even land in the country.

Source: The Daily Herald https://www.thedailyherald.sx/islands/divico-divico-turnover-tax-should-be-replaced-by-import-tax-for-distributors-should-be-replaced-by-import-tax-for-distributors