Editorial: To the full extent

Investing about 20 million guilders in the upgrading of the Tax Inspectorate (see related story) may seem like a lot of money. However, with a fiscal compliance rate of only 22 per cent, according to Finance Minister Richard Gibson, it’s probably worth it.

The latter figure might shock some, but Aruba’s compliance was said to be 24 per cent and that of Curaçao 30 per cent, while the Caribbean average is apparently around 34 per cent. This means that although the level in St. Maarten is far from ideal, it is not incredibly low compared to islands in the region either.

In addition, as Finance Minister Richard Gibson told Parliament, none of those other examples have a French side with all the complications it brings. This doesn’t take away from the fact that steps need to be taken so taxpayers contribute their correct share to the public treasury as much as possible.

Government must do all it reasonably can to ensure a disproportionate part of the collective burden doesn’t fall to just some of the people and local entrepreneurs. Moreover, it’s important to have a level playing field within the business community, to avoid unfair competition.

Tinkering with the current tax system hardly seems advisable at this point also due to the already existing administrative shortcomings, so better execution of the rules now on the books is clearly the preferred way to go in the short run. Enhanced enforcement can make a huge difference, but also will require the necessary control.

One of the areas of concern is that many companies reportedly come up with all kinds of schemes to claim a break-even result or even losses so they don’t have to pay profit tax. Audits such as those done by the Tax Accountant Bureau BAB are to tackle these practices, but it remains difficult because the phenomenon is evidently quite widespread.

The turnover tax is much harder to evade, which is also why it has proven effective in terms of generating revenues. While its cumulative nature has been described as destructive, whatever else replaces it would have to produce the same income.

For now it seems sensible to concentrate on making both corporate and private citizens meet their civic responsibilities to the full extent. That is not only the right thing to do, but anything less goes directly against the interest of all those who at least try to abide by the laws of the land.
Source: Daily Herald
To the full extent