There’s no doubt a good legal reason why non-profit foundations now have to pay turnover and wage tax. The issue came up last month during a Foresee Foundation presentation in Parliament.
The problem is that especially international donors will be reluctant to give money for a good cause if part of it ends up in the national treasury. At least one reportedly had indicated that should its contributions be taxed it would be moving to other islands fast.
Members of the Permanent Committee for Education, Culture, Youth and Sports Affairs were told a solution is needed urgently also for the other several hundred foundations in St. Maarten that depend on funding from the business community. It was said then that this matter had been raised with Finance Minister Richard Gibson already, but nothing more had been heard since.
One can imagine that not taxing non-governmental organisations (NGOs) might open the door to fiscal abuse, but it’s hard to understand how donations can rightfully be considered turnover. After all, the latter normally applies to income generated from commercial activities, which is not the case here.
To the contrary, Curaçao recently announced the removal of import duties on materials donated from abroad. These occasionally would remain in storage at Customs for a long time because the recipients couldn’t afford to bring them into the country.
Foresee Foundation has managed so far to continue and secure quite some support from local companies. However, the future of its social projects may well be in jeopardy if nothing changes.
Ironically, the charity work done by many foundations often actually can be considered a responsibility of the public sector. So here’s a situation where Government is apparently unable to execute certain important collective tasks, yet places a financial burden on those doing it instead.
Something is inherently wrong with that picture.
