Published On: Tue, Sep 6th, 2022

CFT gives green light for revoking salary cuts

PHILIPSBURG — The government has met the requirements that allow it to revoke the 12.5 percent salary cut for employees in the (semi) public sector. This appears from a letter CFT-chairman Raymond Gradus sent to the chairman of the Kingdom Council of Ministers, Dutch Prime Minister Mark Rutte on Monday, September 5.

One of the conditions for approval of revoking the salary cut is that St. Maarten has to finance its consequences from its own budget. The government is not allowed to use liquidity support funds for this purpose.

On August 15, financial supervisor CFT advised that St. Maarten had to find an additional 2.6 million guilders ($1.45 million) within its budget to cover these costs.

The government submitted proposals on August 25 and September 2. It declared 2 million guilders additional revenue from wage taxes, that will be collected as a consequence of the adjustment of the composition of cuts in labor conditions. The CFT points out that the same adjustments will result in lower tax revenue to the tune of 1.3 million guilders. This in turn is a consequence of savings on steps in the salary scales, overtime and bonuses. This leaves 0.7 million guilders to cover the costs of revoking the salary cuts.

The government indicated however that it will also save an additional 2.5 million guilders on expenditures for goods and services. These savings relate to expenditures for projects and activities (1.5 million guilders), legal and expert advice (0.5 million) and contracting third parties (0.5 million).

“The CFT considers this as hard coverage, though it remains unclear whether these savings are structural,” Gradus wrote.

The CFT-chairman concludes that St. Maarten has sufficient additional coverage for the adjustment of the labor conditions in 2022.

The financial supervisor has asked St. Maarten to specify the savings-measures in its third execution report for this year. For 2023, the government still has to substantiate the structural coverage.


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