Finance Minister Perry Geerlings claims no intention to raise taxes and is working on tackling the so-called “grey economy” instead. According to the International Monetary Fund (IMF) this amounts to an average 37 per cent of gross domestic product (GDP) in the Caribbean, which – based on collecting 10 per cent of this untaxed money – would produce 60 million Netherlands Antilles guilders per year in St. Maarten.
It’s probably not that simple, of course, but the minister is correct in going after those who don’t meet their fiscal responsibility rather than burdening others trying to comply even more. While perhaps not the easiest strategy, that would certainly be the right thing to do in the interest of fairness and to ensure a level playing field within the local business community.
The real question is how. Efforts in the past to, for example, tax foreign condo owners renting out their property on that undeclared income proved unsuccessful due to the imposing and heavy-handed approach chosen without data to back it up. In that sense, making tax collection agreements with Airbnb and similar companies offering short-term private visitor accommodations in the country is a no-brainer.
In general, enhancing fiscal compliance remains a complicated issue that requires the necessary expertise. It was therefore good to read in Tuesday’s paper about Geerlings’ meetings with the Social Economic Council SER and the Foundation Tax Committee on his plans.
The devil is usually in the details, so it will be interesting to see just what the minister’s Tax Transformation entails. For now, however, he deserves credit for not wanting to choose the path of least resistance.