The General Audit Chamber of St. Maarten presented its report on the process of ex officio tax assessments.
These administrative tax assessments are issued by government officials without a taxpayer’s request and are considered automatic. When a tax return is not filed, the authorities issue an estimate of income, turnover, profit, and related factors. However, the estimate must be reasonable.
The audit aimed to determine if the condition of reasonableness was met. A surcharge of 10% for individuals and 25% for companies is added when setting the reference amount to encourage taxpayers to file a tax return. The effectiveness of the surcharge is not measured, so its impact is unknown.
The General Audit Chamber attempted to extract random sample data to gain insight into the standard application of the surcharge. However, they were unable to access records due to privacy concerns, preventing them from verifying the consistency and integrity of the ex officio assessment process.
The report concludes that there are risks of arbitrary discretion, as the assessment is not checked for reasonableness by another employee, and there is no established written policy governing the ex officio assessment process.
The report on the process of ex officio tax assessments is published in English and Dutch and is available on the General Audit Chamber’s website (www.arsxm.org) and social media platforms, Facebook and LinkedIn. Interested parties are encouraged to read the report and gain valuable insights into the Audit Chamber’s activities and achievements throughout the year.
