Concerns raised in parliment about planned tax increase on tobacco and alcohol

PHILIPSBURG–The competitiveness of St. Maarten as a duty free destination could be hampered by government’s planned tax increase on tobacco and alcohol products. This was the sentiment expressed by some Members of Parliament in Monday’s Central Committee meeting dealing with the draft 2013 budget. Similar concerns have already been expressed by the business community.

Democratic Party (DP) MP Leroy de Weever said government, especially the Ministry of Tourism, should be lobbying for an increase in the value of tax free gifts US residents and others can take into the United States and in the number of duty free bottles of alcohol. The US Virgin Islands have a competitive edge over St. Maarten, because they have a higher allowance on tax free gifts and alcohol.

De Weever warned that if the country could not compete with the prices on board the cruise ships as well, this would lead to the death and decay of Philipsburg and the country’s economy as a whole.

He has counted at least 52 shops on Front Street, Back Street and in Philipsburg that have closed down “with no one standing in line to reopen them.”

The MP also pointed out that an increase in diesel levy could drive up the cost of water and electricity, as Utilities Company GEBE operates on diesel.

MP Roy Marlin (DP) said part of the revenue government is attempting to raise via the alcohol and tobacco tax could be covered by the implementation of the residence permit fee, as proposed by Justice Minister Roland Duncan. He called for the law, if it is ready, to be tabled in parliament for approval. He also pointed out that the money from the fee does not belong to Duncan, but to the government to disperse as needed. Duncan had suggested the fee as a means of paying for the planned Justice Park in Cay Hill.

Marlin said government should be focused on collecting taxes that are “on the books and we don’t collect, instead of implementing new taxes that may “prove more complicated to collect.” The ordinance to enact the tax increase still has to come to parliament. He said the increase could not take effect “until 2014 if we don’t watch out. We need to rethink and refocus to see if the budget will bring a relief to the situation.”

United People’s (UP) party MP Jules James asked about government’s contingencies in place to cover these increases should they not be accepted by Parliament. He noted that government only has six months to collect revenues generated by the planned increase.

National Alliance (NA) MP Louie Laveist also had concerns about the execution of the tax increase on tobacco and alcohol and the negative impact this might have “on our brand as a duty free destination.”

Independent MP Patrick Illidge stressed the need for efficiency and service from government to the community.

Independent MP Romain Laville said employment needed to be addressed and called again for a solution to the police records taking too long to be issued once requested. He also pointed out that too many young men are hampered from finding work because they had a brush with the law.

United People’s (UP) party MP Johan Leonard called the draft budget “a worthless document.” He said government funds should not be used like “a black American Express” card for items such as the “Tempo fiasco.” He questioned why the budgets for the General Audit Chamber and Advisory Council were cut and how government expected to get higher tax compliance when the personnel budget for the Tax Office was slashed.

MP Sylvia Meyers-Olivacce wanted to know what Finance Minister Roland Tuitt “was thinking” when he decided to write off all the back taxes owed up to 2006.

The budget debate continues in Parliament House today, Tuesday, at 9:00am, with more questions from MPs to the Council of Ministers. TDH

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One thought on “Concerns raised in parliment about planned tax increase on tobacco and alcohol

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