Published On: Fri, Dec 30th, 2022

CFT unhappy with deficit on draft 2023 budget

PHILIPSBURG — Financial supervisor CFT is not happy with St. Maarten’s draft 2023 budget. While the Kingdom Council of Ministers decided on September 30, that this budget has to be balanced, it shows instead a deficit of 72 million guilders ($40.2 million).

“St. Maarten must balance its 2023 draft budget and its multi-annual budget to generate surpluses for the payments on loans and the compensation of deficits,” the Cft writes in its advice to finance Minister Ardwell Irion.

In 2023, a loan of 73.5 million guilders ($41 million) from 20210 expires. “A surplus on the budgets of 2024 and 2025 would be desirable,” the Cft writes, adding that the deficit for 2022 is much lower than expected and that therefore a balanced budget for 2023 is within reach.

The financial supervisor repeats its advice to introduce, in 2023, a casino tax, a tax on the import of private goods, and an adjustment of the room tax, including collection through AirBnB.

St. Maarten budgets 520 million guilders ($290.5 million) for goods and services in 2023. This is 10 percent higher than the 2019-level and it is also above the expected realization in 2022. The Cft advises to adjust this budget item downwards.

The budget for capital investments is balanced, but only because Finance Minister Irion assumes that the liquidity support-loans will be completely refinanced. Agreements to this extent still have to be made.

The Cft again expresses its concern about the untenable financial situation of the social security funds. Their accumulated deficit per the end of 2021 was 345 million guilders ($192.7 million).

The Cft furthermore notes that St. Maarten intends to collect taxes and social premiums from lottery booths, that St. Maarten’s national debt per ultimo 2023 is 1,252 Million guilders ($699,441,341, or 52 percent of Gross Domestic Product) and that the draft budget for 2023 does not include dividends to be paid by government-owned companies.