Honourable Minister of Finance Hiro Shigemoto, forwarded a letter dated March 1, 2011 to the President of Parliament Hon. Gracita Arrindell in response to a from National Alliance (NA) Honourable Member of Parliament (MP) George Pantophlet dated February 16, 2011 addressed to Hon. Prime Minister Sarah Wescot Williams and received by the Cabinet of the Minister of Finance on February 23.
Hon. MP George Pantophlet in his letter made five recommendations with respect to the 2011 budget deficit. The letter was discussed in a Council of Ministers meeting before being forwarded by the Prime Minister to the Minister of Finance.
MP George Pantophlet: That the government owned companies, the Harbour Group of Companies, Juliana International Airport and GEBE N.V. contribute a collective amount of Naf.44 million to government coffers.
Minister: It would not be in accordance with good corporate governance to demand government owned companies to contribute a collective amount of Naf.55 million to government coffers. These companies have financial obligations to lenders, which was approved by former Island Councils and this needs to be taken into consideration.
MP George Pantophlet: That the ordinance increasing the Turnover Tax (ToT) from three per cent to five per cent be reversed and set again to three per cent.
Minister: The increase of the ToT from three to five per cent was needed in order to balance the budget. Reversing the increase will lead to a budget deficit of Naf.56 million. Furthermore, for reasons of business convenience, rigid rules are necessary. It would not be in accordance with the principle of legal certainty to reverse the amendment to the ordinance.
Presently there is a new tax work group in place to develop a more simplified and transparent tax structure. It is expected to be in place in 2012. Along the way the work group will be looking at easy transitional improvements to existing tax laws which would pave the way to a more simplified and effective tax system.
MP George Pantophlet: That some shares of the Harbour Group of Companies, the Juliana International Airport and GEBE N.V. are to be sold to interested companies or persons and have the funds generated used to eradicate the budget deficit.
Minister: Selling the shares of government owned companies to eradicate the budget deficit is a one-time solution and not a structured solution for subsequent years. Besides this the CFT would not accept solving structural expenditures with incremental monies. In addition, N.V. GEBE is owned by a foundation, which is owned by Sint Maarten, Saba and St. Eustatius and not government.
Moreover, it would not be recommended to sell shares of government owned companies to interested companies or persons because it can have an adverse effect. Once shares are sold, these interested companies or persons may acquire sufficient voting rights to change the organization structure of these companies and make changes with far reaching consequences. This can lead to measures such as downsizing of employees. Hence, the reason not to sell these shares. However, it could very well be that I do not fully understand your question or your idea and therefore I would be more than happy to hear more of your idea regarding the sale of some shares of the Harbor Group of Companies, the Princess Juliana International Airport and GEBE N.V.
MP George Pantophlet: That some of the funds from the 7 or 8 CD’s (time deposits or fixed deposits) of government containing millions of guilders be used to eradicate the budget deficit.
Minister: This proposal was already initiated by my person as one of the measures taken as an adjustment to balance the 2011 budget. We are still awaiting advice from the CFT on this measure.
MP George Pantophlet: That the collection for back taxes be eliminated providing they are prior to the year 2006.
Minister: In response to your proposal, Article 10 of the Invorderingsverordening (Bovenwindse Eilanden) (AB 1970 No.3) is applicable.