�SHTA: govt makes drastic, previously undisclosed changes
PHILIPSBURG--St. Maarten Hospitality and Trade Association (SHTA) is sounding the alarm bell about what it says are drastic changes government has made to the Turnover Tax (ToT) legislation, which it says depicts a "completely different picture" than what was presented to the public.
"The SHTA believes that, while the increase was presented to the public as merely a change from 3 to 5 per cent in the existing legislation, the now-published legislation introduces drastic changes to the Turnover Tax, depicting a completely different picture," SHTA said in a letter dated January 9 to Ombudsman Nilda Arduin-Lynch.
SHTA said that, after consultation with the tax committee on the recent ToT amendments, it had decided to relay its concerns and "demand for intervention with regard to this dramatic change in legislation.
"The SHTA is surprised that the Council of Ministers and Parliament would ratify legislation that is so drastically different than a simple increase of 2 per cent in the existing ToT," SHTA said.
"In fact, the adjustments made to Article 5 in conjunction with the new Article 11 ? taken from the distilled version published by PWC [PricewaterhouseCoopers, ed.] ? states that: Non-resident entrepreneurs that deliver (goods) and provide services to resident buyers are deemed to be domiciled (and thus subject to ToT) at the Inspectorate of Taxes. In addition, if the buyer is an entrepreneur, the entrepreneur must account for these purchases and pay 5 per cent tax on them.
"For deliveries of goods and provision of services to consumers, the non-resident entrepreneur remains subject to tax. The new ordinance does not include the possibility to offset the tax charged on purchases against the tax payable on sales revenues."
SHTA says this means that imported goods and services are now subject to Turnover Tax by the company importing them, effectively establishing a 5 per cent import duty for resident companies, resulting in an additional layer of taxation, which heretofore has been undisclosed.
"The SHTA is of the opinion that the 5 per cent tax levied on imported goods and services will be passed on in threefold to the consumers, thus increasing the cost of living potentially by 15 per cent. In short, this change to the Turnover Tax is not just an increase of 67 per cent of the old rate; the total tax rate has more than doubled.
"This is economically irresponsible, and the direct result of the rush to resolve a budget crisis without taking into consideration the full consequences of such a measure, nor taking the time required to include social partners in open dialogue about reasonable, sustainable changes to tax and economic policy.
"The SHTA is a proponent of simplifying the tax system and broadening the taxable base, thereby increasing compliance and revenue for government. Merely imposing a higher tax on the individuals currently complying will not solve the budgetary needs.
"We strongly believe that by introducing this measure of over-taxation, government will further erode its taxable base, its expense to enforce and reduce its projected income thereby still not meeting the needs of its budget. Further, we predict it will lead to more resentment from the shrinking base and greater tax avoidance."
SHTA said this policy was the a direct result of the lack of true partnership with social peers, and was worried about its effect on existing businesses and on much-needed, new investments required to sustain this economy.
"This is just one of the articles that have not been properly thought out and we therefore believe that the proposed legislation should be revised in consultation with all social partners and adjusted to safeguard the residents and the economic future of St. Maarten."
The letter signed by Executive Director Valya Pantophlet has been copied to Governor Eugene Holiday, Parliament and the Council of Ministers.
Nuclear weapons Mergers and acquisitions Pensions Sri Lanka Roy Hodgson Highlands
No comments:
Post a Comment