~ Says businesses would never survive ~
PHILIPSBURG, Sint Maarten – According to Independent Member of Parliament Christophe Emmanuel, any discussion about a raise in Turn-Over-Tax (Tot) combined with the implementation of a VAT (Value Added Tax) is unconscionable and does not realistically consider the private sector and consumers of St. Maarten. Implementation of either, he stressed, would also effect the public sector as the ripple effects will affect government’s bottom line negatively.
Emmanuel said government should instead finally tackle its waste and creatively develop ways to generate funds without further burdening the population. If the government is unable to think creatively, he said, the country is filled with educated creative thinkers, “host an economic forum and get your best together to find solutions,” he said.
The MP said he does not understand why looking at such things as gasoline excise taxes (which he has proposed) and/or increased tourism taxes are such taboo subjects. “Especially with new or increased tourism fees you get some people spreading gloom that the tourists will stop coming. Travellers the world over are very accustomed to tourism fees being increased and applied, especially now in the pandemic era. We boast of the high season yet we are afraid to actually do something to make the high season actually benefit the regular person. Instead, we talk about burdening them with destructive taxes,” Emmanuel said.
He said any discussion about increasing TOT shows disconnect with what is happening on the ground. Small businesses, he pointed out, have such small profit margins or are in such debt, many are staying in business out of pride or under less-than-ideal situations.
“Even if profit tax is reduced, what happens to the sole proprietor that doesn’t pay profit tax? An increase in TOT will bury them. A reduction in profit tax isn’t enough to balance what will be lost by an increase in TOT. The trouble with turnover tax is that you pay tax even if your company is losing money. It’s a terrible tax in a country where small and medium enterprises are the back bone and failure to go after the million-dollar tax dodgers seems to systematic and habitual,” the MP said.
Emmanuel said the talk of a VAT is again being whispered in the halls of government. As he has stated previously, the burden of the VAT falls disproportionately on the poor since the poor are likely to spend more of their income than the relatively well-to-do person.
“It has also been proven that revenue from value-added taxes arefrequently lower than expected because they are difficult and costly to administer and collect. The fact that a VAT is also administered along every stage of the supply chain (it has to be calculated at every stage), means that again prices will raise beyond control,” Emmanuel said.
The disclosed that in due time he will present some revenue generating ideas once they are worked out but once again called for the staging of a serious economic summit/forum.