Sunday, Jul 21st

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Editorial - Integral approach

Politicians in The Hague frequently refer to money laundering as one of the main threats to St. Maarten that needs to be forcefully tackled. It no doubt regards a serious crime with international implications, especially when combined with the possible financing of terrorist activities.

A related aspect is that of tax evasion, or “black (market) money” as commonly referred to in the Netherlands. In truth, the European part of the kingdom has experienced its share of headaches with this issue.

One of the reasons was a rather ambivalent policy on “soft” drugs there, allowing people to use but not grow or distribute cannabis. This meant the proceeds from such activities could not be properly declared and taxed, although nowadays the mandatory registered retail sales are.

Something similar used to be the case with the sex industry especially in major Dutch cities. Prostitution was always tolerated, but not legal.

Contrary to the prevalent system on the islands where brothels function as legitimate companies, acquire special work permits for “exotic dancers” and file their income like any other business, in the Netherlands often independent prostitutes would rent small rooms with windows facing the street in so-called red-light districts. It must be said, after the decision was made to tax them some years back their numbers dwindled quickly.

The point is that sending over a bunch of criminal investigators to go after suspected money launderers only addresses one end of the problem. To really be effective the effort actually should be accompanied by an enhancement of the capacity to control, levy and collect taxes effectively.

The latter includes strengthening the Reporting Centre for Unusual Transactions and the Prosecutor’s Office to go after suspect cases, but also the Receiver’s Office and Tax Department. However, repeated requests to The Hague for additional support with the latter by Finance Minister Martin Hassink appear to have fallen largely on deaf ears.

And that’s regrettable, because the lack of fiscal compliance – some claim no higher than 50 per cent – is recognised as one of St. Maarten’s major drawbacks. Of course, it remains a local responsibility, but a bit more help would go a long way in achieving a comprehensive, integral and therefore probably more successful approach.