The cost of living
The Antillean parliament recently approved a law regulating exemptions from the turnover tax that also ended the exemption for so-called “fiscal unity,” which means that transactions between a company and its subsidiaries are no longer exempt. Some might not realise it, but this could lead to significant price increases for especially food products imported by wholesalers and sold to their supermarkets.
The idea of the exemption was to avoid de facto double taxation, where a product would be taxed at every stage of its import, distribution and sale. Coming on top of ever increasing oil prices, the move could make St. Maarten a considerably more expensive place to live, work and do business, with all possible consequences.
The companies involved could, of course, opt to place all their business activities under one umbrella again, but that will take quite some doing. In the meantime, prices keep going up, also because of increased transport cost, and there is no end in sight.
Under the circumstances, groups in Curaçao have been advocating doing away with or at least reducing the gasoline excise tax, of which St. Maarten receives 25 per cent. This would mean less money for both the Island Territory and the Central Government, of course, but it would also provide motorists with some much-needed relief and take away some of the pressure for higher prices and tariffs of, for example, taxis.
Some, including sources in the Central Bank, believe that under certain circumstances such a temporary step might be worth considering, because of the positive effect it would have on the economy, which could in turn produce more revenue for government.
When the excise tax was increased in St. Maarten some years ago and gas on the French side became cheaper, many crossed the border to fill their tanks, with the result that government actually received less income than before. The excise tax was reduced again later.
The Windward Islands water and electricity company GEBE should also see what can be done about the astronomical fuel charges that are literally closing down businesses because they can no longer afford their electricity bills. There have been suggestions that the current charges are not even completely justified by the high oil price.
Lowering the charges could mean less income for the government-owned utility company, but here again, if businesses close down as result of the high charges, the company will lose customers, at least temporarily.
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