French side gets
new tax system
MARIGOT--Elements from the first phase of the Collectivité’s proposed new tax system were presented to business leaders and the Collectif Économique et Social on Tuesday and drew a largely favourable response.
The presentation was made by President Louis-Constant Fleming, Vice-president Daniel Gibbs, and tax and legal expert Professor Bernard Castagnède, adviser to the President on tax affairs, following Fleming’s return from his recent working visit to Paris.
A more exhaustive presentation of the tax proposals was made at Wednesday’s Territorial Council meeting with added input from the Professor. The majority voted in favour of the first phase presentation.
The complex and technical tax system where modifications relate to St. Martin is to be introduced in several phases and are included in some 30 articles of law. The articles relate to taxes and duties payable and are listed under several different category headings.
Of interest for St. Martin is the general income tax rebate which has been increased to 40 per cent from 30 per cent on the national tax table calculation applicable from January 1, 2008. Taxes are payable in 2008 on 2007 revenue. The Collectivité hopes to increase this rate even more in 2008.
There are also reductions in the two levels of profit tax rate for small and medium-sized businesses. It was voted that the 15 per cent level tax rate will be reduced to 10 per cent and the 33 per cent level to 22 per cent.
Since the Collectivité was established, St. Martin is no longer a destination eligible to benefit from national defiscilisation laws. But before anyone can apply for tax credits on investments worth over 500,000 euros an approval (demande d’agrément) must be sought from Government.
To give local residents incentive to realise their real estate investments, the Territorial Council proposes to create a “local” defiscilisation scheme whereby there would be a 30 per cent reduction on tax payments over 5 years on local real estate investments and a 25 per cent reduction for 10 years on investments in housing projects.
In other changes, a car tax will definitely be introduced but the wealth tax ISF (Impôt sur les grandes fortunes) has been abolished.
The second phase of the tax code is still to be introduced and will include property taxes, land taxes, and the professional tax which is to be replaced by the licence system.
“The picture they have presented is interesting, and it is what everybody has been expecting,” said business owner Jean Canet, a member of Collectif Économique et Social. “We have to see if it’s going to work. We just don’t know yet. But I didn’t detect any negative reception from the audience.”
“The only thing is they have not yet done an assessment of the cost of running the Collectivité. The Collectivité needs to run for about one year with the new taxation system in place to see the effects.”
President of the Chamber of Commerce Raymond Helligar commented that despite the positive future outlook, he believed urgent and immediate concerns of businesses have not been sufficiently addressed.
“I’m not completely satisfied. Yes, there is hope. But so far there are a lot of promises and nothing concrete,” Helligar said.
Canet noted that a recent inventory indicated more than 62 businesses have closed in Marigot, some this year and others in recent years.
