As part of the tax reform program being undertaken in 2012 and 2013 the Tax Administration - represented by the Receiver's office and the Inspectorate of Taxes – are both working to collect reliable up-to-date information on individuals and companies doing business in Sint Maarten.
As part of this exercise a number of businesses have received information letters. In some cases these were combined with assessments for back tax regarding the year ending 31 December 2006.
The response to the 2006 compliance initiative is still on-going but so far it has served to successfully identify both individuals and businesses who were previously non registered tax payers.
The Tax Authority identified potential non-taxpayers from a variety of sources (advertising material, other official records etc) and in some cases it is clear that existing taxpayers have received the assessments (for example where they trade under multiple names).
As the intention of the exercise undertaken was to identify non-taxpayers then those assessments sent to compliant taxpayers in error will be revoked on production by the taxpayer of appropriate evidence of the taxpayer's status. This has already happened in a number of cases and it is the intention of the Tax Authority to deal with any objections expeditiously.
One must always keep in mind the objective of this project which is to successfully identify those who are currently not registered tax payers, who are not paying tax at all, or to identify those tax payers that show evidence of serious underpayment of taxation.
In order to facilitate that all taxpayers who have valid objections against the assessments they received, the period to file an objection letter has been extended from 29 February 2012 to 31 March 2012.
The latter date is also the same date that the information letters need to be answered. All objections letters submitted by 31 March 2012 that meet the requirements set out in the information letters will be held admissible.
While the Tax Administration is updating its information, tax payers currently not registered are still encouraged to apply for a CRIB number and disclose any unpaid taxes.
The Tax Administration will refrain from levying administrative penalties from citizens and businesses coming forward and report their tax obligations before 31 March 2012 so long as they have not yet received an information letter in which they are identified as possible unregistered tax payers.
The Tax authorities have started discussions with the Sint Maarten Chamber of Commerce & Industry (SXMCOCI) to make sure that all registered business will also be known by the Tax Authorities. In this respect the Tax authorities have requested access to the SXMCOCI data.
The objective here is to broaden the tax payer's base and have the lowest possible tax rate in the future.
This initiative is by no means intended to serve as an exercise in creating a greater tax burden for existing tax payers that are in good standing. The objective here is and always has been to broaden the tax base and to make sure that all citizens and/or companies operating in Sint Maarten pay the right amount of taxes due at the right time.
Another reason for this approach is to speed up the process of identifying the exact tax payer's base. In the upcoming tax reform proposals the administration will want to have the lowest tax rates within the inevitable constraints of appropriate budgetary prudence. Broadening the tax payer's base is therefore crucial in this process.
Individuals and companies who have received the information letter may have some questions on how to deal with this. There is a dedicated project team at the Tax Administration building and the number to contact is 526-8127.