PHILIPSBURG, Sint Maarten – Minister of Finance Hiro Shigemoto says that the Sint Maarten Hospitality & Trade Association (SHTA) interpretation of the changes to the Turn over Tax (ToT) law are incorrect including the analysis by Van Vliet of Price Waterhouse Coopers (PWC).
The Minister says he has also taken note of the SHTA letter to the National Ombudsman of January 9, 2011 in connection with the recently approved Ordinance to amend the Law on ToT.
This misinterpretation and misinformation to the business community and the public at large will only lead to confusion and un-necessary worry. The Ministry of Finance has provided an elaborate explanation to Van Vliet with respect to the changes to the law.
"On January 7, 2011 in an elaborate email, the Ministry of Finance took the time to explain to Mr. van Vliet of PWC, and who is also a board member of the SHTA and the Foundation Tax Committee, that his interpretation of articles five (5) and 11 is not completely correct.
"There is indeed an omission in the ordinance, but that would be solved via what is known as a "reparatiewet" corrective law. Even if this reparatiewet was not done, which it will be done, even in such a situation the current law would not have led to the undesired situation as presented by the SHTA in its explanation in a letter to the ombudsman.
"The law operates under a clause known as the "hardheidsclausule" whereby taxpayers can appeal their case when the law leads to consequences which were clearly not intended by the legislature. Any tax advisor would know this," the Minister of Finance pointed out on Sunday.
Minister Shigemoto in his comments on the SHTA letter to the National Ombudsman, had the following to say: "I find it difficult to understand why the SHTA after receiving an explanation from the Ministry of Finance, still decided to write a letter to the National Ombudsman complaining about the lack of cooperation with the SHTA with the compilation of the Ordinance on the Turnover Tax.
"Although as Minister of Finance I explained in detail to the SHTA the unfortunate but realistic circumstances under which the government was forced to come to this temporary solution, still at this stage such an action is undertaken.
"It should be noted that the ordinance has been established in compliance with all constitutional requirements and is therefore legal. Moreover, "Goods" are also taken up in the old Article five (5), paragraph three (3). The amendment will therefore only be applicable to services in order to restore the level playing field. For "Goods", the old situation will be maintained," Minister Hiro Shigemoto pointed out.
The Minister says that an information campaign will commence within short where representatives of the Ministry of Finance will be providing information to the community with respect the increase in ToT from three to five per cent.
"The provision of information is essential in order to avoid situations of mis-information. Professional organizations as well as other well known personalities within our community should have all the facts at hand and a complete understanding of the issue before making public statements which only creates confusion.
"The Government looks forward to working with all social partners in order to reach an understanding where all interests are taken into consideration leading to a new tax regime that covers the national budget of the country.
"The basis of the relationship has to be on the principles of trust. If there is no trust and we choose to communicate in such a manner then how will this help to lead to a professional, productive and constructive environment which should serve as a working platform between government and its social partners in coming to a better tax system for Country Sint Maarten?," Minister Shigemoto questioned.