The January 31 deadline for adopting the 2015 budget was met by Sint Maarten. The Cft concludes, however, that not all recommendations on the draft budget have been taken into account. The budgeted income ceiling is, at ANG 445 million, higher than the recommended level of ANG 426 million, the long-pending payment arrears to SZV and APS are not yet settled and the deficits of past years have not been compensated for. The Cft has held constructive discussions with the government how to resolve these remaining issues.
The Board of Financial Supervision (Cft) visited Sint Maarten from February 23rd to February 24th, which was its first visit to the Gumbs administration. Meetings were held with the Governor, the vice Prime Minister, the minister of Finance, the Council of Ministers and the Financial Committee of Parliament. Main topics of discussion were the outcome of the 2014 budget and the follow up of the recommendations of the Cft on the draft 2015 budget. The Sint Maarten Government has up to March 2nd to demonstrate to the Cft that the remaining issues in the 2015 budget will be dealt with in a timely and orderly manner and that the budget is in line with the stipulations of the Kingdom Law of Financial Supervision.
2014 budget
The government has informed the Cft that according to preliminary data government revenues in 2014 amounted to ANG 430 million. The budget will show a moderate deficit in the order of ANG 8 million. The Cft is awaiting the final figures for further analysis.
2015 budget
The 2015 budget was adopted by Parliament and signed off by the Governor late January, in time for the postponed deadline of January 31. The Cft has raised three issues concerning the budget. First, the income ceiling is set at a level of ANG 445 million, which is higher than the results of prior years. Second, payment arrears of approximately ANG 200 million to mainly SZV and APS have not been settled yet contrary to earlier commitments. The chairman of the Cft reiterated his concern about this unresolved issue. Third, deficits since 10-10-10 have accumulated to a total of approximately ANG 55 million which need to be compensated. The Cft has sent its advice on the adopted budget 2015 to the minister of Finance who now has up to March 2nd to respond to the recommendations of the Cft.
Possible solutions were discussed during the meetings with Government. Supporting documentation on the expected increase in revenues of ANG 15 million will be provided by the Government. The Cft will monitor the revenue realization over the first four months of 2015 to determine whether this increase is justified. As to the payment arrears with SZV and APS, it was agreed that these will be settled before the end of May. The Cft will in its next visit in June review the outcomes and discuss the compensation of the prior year deficits.
Multi annual approach
Sint Maarten is preparing a multi annual vision document to stimulate the economy, which would enable Sint Maarten to increase revenues and realize a budget surplus as of 2016 to compensate for the prior year deficits. This document consists of four pillars, i.e. an economic development program, reorganization of the tax authority, redesigning the tax legislation and intensifying the current program of increasing income and decreasing expenditures. The Cft applauds this multi annual approach. It has advised Government to involve an external independent authority to review the plans and provide an expert seal of approval. This would also increase public confidence and should attract private investors, since Government cannot execute this plan on its own.
