CFT responds positive to St. Maarten’s compliance

CFT responds positive to  St. Maarten’s compliance

CFT St. Maarten member Julisa Frans (left), CFT Chairlady Lidewijde Ongering (center) and member Hans Hoogervorst. (File photo CFT)

THE HAGUE--Country St. Maarten has complied with the recommendations of the Committee for Financial Supervision CFT to reserve means for the compensation of earlier deficits and to draft a multiannual calculation and multiannual investment agenda.

Because the St. Maarten budget will be adapted in such a way that it will comply with the Kingdom Law Financial Supervision RFT, the CFT will give its blessings to St. Maarten’s request to secure loans for investments.

The CFT shared this good news in a letter that it sent to St. Maarten Finance Minister Ardwell Irion on May 10. The CFT stated in its advice of April 19 this year that the 2023 budget complied with the RFT, but that the multiannual budget did not contain surpluses for 2024 and 2025.

Surpluses are necessary to comply with the RFT which states that deficits of earlier years must be compensated, the CFT pointed out. The CFT advised St. Maarten to adapt the multiannual budget in such a way that it included surpluses per 2024 to compensate the deficit of earlier years and to also reserve means to repay a loan in 2025.

The CFT in April further advised Minister Irion to include a multiannual calculation in the capital account and to commence drafting a multiannual investment agenda. Irion informed the CFT that St. Maarten would adapt the multiannual calculations for the regular account through a budget amendment for 2023.

The minister also informed the CFT that St. Maarten expected additional cost savings in connection with the execution of the reforms, including tax reforms resulting in a higher tax compliance, from the Country package.

St. Maarten is counting on higher tax revenues per 2025 because of the economic growth. The cost savings and higher revenues should result in surpluses on the budgets’ regular account of NAf. 4 million in 2024, NAf. 9 million in 2025 and NAf. 15 million in 2026.

Irion also informed the CFT that the multiannual calculation of the capital account will be included in the 2023 budget amendment and that the ambition was to invest 1% of the Gross Domestic Product (GDP) in 2024 and 2025. Furthermore, St. Maarten aimed to, through the Netherlands, completely refinance a government bond of NAf. 73.5 million which lapses in 2025.

With these commitment, St. Maarten is giving content to the required deficit compensation, the CFT noted. “The liquid means, which will be a result of the surpluses, can be used to repay debts and finance the planned increase of the investment level,” stated the CFT, which advised to include this information in the negotiations with the Netherlands about the refinancing of the liquidity support.

“The CFT is of the opinion that St. Maarten has given sufficient follow-up to the recommendations of the CFT. Now that the budget will be adapted to be in accordance with the RFT, St. Maarten can go over to secure the planned loans,” the CFT concluded its letter.

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