Hassink supports Tuitt’s idea to exempt foundations from audit

June 08, 2012 9:51 AM

PHILIPSBURG--Veteran accountant Martin Hassink of Baker Tilly St. Maarten said on Thursday he fully supported the announcement by Minister of Finance Roland Tuitt that he would seek to have foundations exempted from having to present audited financial reports to government.

In an invited comment, Hassink said such a move had been necessary for a long time, considering the number of foundations with small subsidies that could not afford the full scope of an auditor's work. "It makes no sense to require an audit from these foundations," Hassink said, adding that the Minister would have to determine what entities qualified as small, medium and large foundations.
 
He said big foundations with multimillion-guilder subsidies should be required to produce an audit. "But a foundation that gets NAf. 100,000 in subsidy should get specific procedures to follow and then determine what it wants the auditor to do."
 
He continued: "A full audit means the auditor would have to do specific work; he can't say he will only do part of it. And that means for those foundations the cost will be relatively high and the auditor can't give a qualified opinion, so what's the sense of doing that?"
 
Hassink said that with specific procedures to follow, as the Minister had mentioned, government could be presented with a better financial report, the subsidised entity would incur lower cost and compliance would be easier.
 
The Minister also stated that he would invite accounting firms to submit proposals for new procedures and adaptation of the subsidy law. He stressed that government would have to find means to exert control, considering it was "the people's money" involved. "The accounting world has other instruments and those instruments can be used to be able to make it more effective and affordable for government and the foundations themselves."
 
On the related issue of tax compliance, Hassink said that while there had always been a lot of speculation about compliance, compliance could be divided into different stages.
 
"Maybe you have businesses that are not registered at all, continue to do business and do not pay anything to the coffers of government. But maybe there are businesses that are registered, pay their monthly taxes, but perhaps don't pay what they should pay. So there are different types of compliance," he said.
 
"In the past we've heard percentages of 50 per cent noncompliance. I don't believe that it is so bad. I think more in the area of 10-20 per cent, but nobody can support the figures, because one of the problems in St. Maarten is that the statistical information is very bad. So now that we are a country we can build that up.
 
"Economic Affairs is already doing a lot of work on that, so we say, 'Hey, certain things don't match and something is going wrong based on statistical information.' Then you can better direct your compliance activities to those areas."
 
Minister Tuitt also stated on Wednesday that it was better to focus on improving tax compliance than on formulating a new tax system, especially when compliance was tagged at lower than 50 per cent.
 
A new tax system for the country will be worked on "in the future," but "right now the main item is getting the compliance rate up," he told the press.
 
Government's tax collection policy, which is regulated by law, also will be looked into as part of the overall tax situation.

(The Daily Herald)