Gumbs Sets Four Finance Ministry Priorities for 2027

GREAT BAY--Minister of Finance Marinka Gumbs has identified four major policy priorities for the Ministry of Finance in 2027, while warning Parliament that staff shortages, weaknesses in tax collection, hidden financial obligations, delayed structural reforms and insufficient oversight of government-owned companies remain significant risks to St. Maarten's public finances.

Speaking during Tuesday's debate on the draft 2027 National Budget, Gumbs explained that the Ministry's policy agenda will concentrate on modernizing the tax administration, improving budget preparation and monitoring, strengthening financial management and internal controls, and advancing tax reform.

These initiatives support the Ministry's broader strategic objectives of sustainable public finances, greater transparency and public trust, a stronger economic position for St. Maarten, and inclusive growth and development.

1. Modernization of the Tax Administration

The first priority is the continued transformation of the tax administration into a modern, efficient and service-oriented organization.

The Ministry intends to strengthen compliance monitoring, improve taxpayer services, expand digital systems and establish better management information to support tax assessments and collections.

Among the practical initiatives planned for 2027 are the introduction of a compliance baseline program, improvements to taxpayer registration, implementation of a new business taxpayer portal and standardized payment processing.

The Ministry will also introduce management dashboards to monitor filing compliance, payment compliance, outstanding tax arrears and collection performance.

Another initiative aims to simplify filing requirements for qualifying senior citizens whose only income is their AOV pension.

The broader modernization project includes significant ICT investments to replace fragmented systems and reduce dependence on manual administrative processes.

2. Improving Budget Preparation and Monitoring

The second priority is strengthening the national budget preparation and monitoring process.

Gumbs pointed to the timely submission of the draft 2027 budget in September as evidence of progress after years of delayed budget submissions.

The Ministry intends to institutionalize earlier planning, clearer deadlines and stronger coordination across government ministries.

A key objective for 2027 is implementing Article 44 of the National Accountability Ordinance, which requires government to submit budget execution reports to Parliament three times annually.

These reports are intended to give Parliament more regular information about government spending, revenue collection and the overall execution of the national budget.

The Ministry will also review the presentation of budget documents to improve their clarity and usefulness for parliamentary oversight.

Earlier consultations with the Council of Ministers and coordination among ministries will form part of the preparation process for future budgets, with greater attention to aligning policy priorities with available financial resources.

3. Strengthening Financial Management and Internal Controls

The third priority focuses on improving the reliability of government's financial administration and strengthening internal controls.

The Ministry intends to continue implementing approved financial work processes with built-in control mechanisms, supported by the rollout of the government's enterprise resource planning system.

Priority areas include procurement and payment procedures, revenue management, subsidy administration and payroll processing.

The Minister indicated that stronger financial systems are necessary to improve accountability, reduce administrative errors and support the timely completion of annual accounts and other financial reports.

Approximately Cg 3.6 million is associated with this objective, comprising Cg 1.5 million in capital investments and Cg 2.1 million in operational expenditures.

The Ministry expects these investments to strengthen financial reporting and support more consistent financial procedures across government.

4. Advancing Tax Reform

The fourth priority is reforming St. Maarten's tax system.

According to Gumbs, the current system is fragmented, administratively burdensome and insufficiently aligned with the needs and structure of the modern economy.

The Ministry's objective is to establish a simpler, fairer and more efficient tax framework that supports economic development while improving compliance and revenue collection.

The first phase of the reform agenda in 2027 includes advancing legislation to repeal outdated tax laws and introducing a revised General National Ordinance on National Taxes.

The proposed changes are intended to modernize the legal framework governing tax administration and compliance while bringing the country's tax system further into alignment with international standards, including those of the Organisation for Economic Co-operation and Development (OECD).

The Ministry has allocated approximately Cg 900,000 for this work in 2027, including approximately Cg 200,000 for external expertise and capacity support.

Staffing Shortages Remain a Major Constraint

Despite the Ministry's policy ambitions, Gumbs identified limited staffing capacity as its principal operational constraint.

At the beginning of 2027, the Ministry expects to have approximately 134 full-time equivalent employees in service, although the budget provides room for 163 positions.

The Ministry's formal organizational structure provides for 214 positions, meaning only approximately 63 percent of the established formation is filled.

Of those positions, 148 are designated for the tax administration.

The shortage is particularly serious at the management and specialist levels, where the Ministry lacks sufficient expertise in financial analysis, policy development, tax assessment, international tax compliance and other technical functions.

According to the Minister, only two management positions are formally filled, with another being occupied on an acting basis.

The Ministry intends to begin a comprehensive review of its organizational structure and function book to align staffing requirements with its current responsibilities and future objectives.

Major Financial and Operational Risks Identified

Gumbs also presented Parliament with the Ministry's assessment of major risks to public financial management. The risks include:

• Hidden and implicit financial liabilities: Government may face obligations that are not immediately visible in its financial reporting. These could result in unexpected expenditures and additional pressure on future budgets. The Minister assigned this risk the highest impact rating of five out of five.
• Delayed structural reforms: Postponements in reforms involving pensions, healthcare and taxation could result in increasing financial obligations without sufficient long-term funding. This risk was also assigned an impact rating of five out of five.
• Informal economy and tax collection challenges: The size of the informal economy, weaknesses in compliance and difficulties collecting taxes could limit government revenue and prevent collections from reaching their potential.
• Government-owned companies: Insufficient transparency, financial reporting and oversight could allow operational problems, financial losses and growing liabilities at government-owned companies to go undetected until they create fiscal pressure.
• Staff shortages and loss of institutional knowledge: Vacancies and the lack of qualified personnel could delay important projects, weaken policy implementation and increase workloads. The Minister also identified employee burnout and the potential loss of institutional knowledge as risks.
• International tax compliance obligations: Failure to comply with OECD-related requirements could harm St. Maarten's international reputation, credibility and economic relationships. Although the Minister assessed the likelihood as lower, she warned that the consequences could be significant.

In her broader budget presentation, Gumbs also identified exposure to hurricanes and other external economic shocks, growing interest obligations and the refinancing of existing government loans in 2029 and 2030 as additional threats to the country's financial stability.

2027 Must Become a Year of Implementation

The Minister emphasized that addressing these risks requires more than additional policy documents and planning exercises.

The Ministry's focus for 2027 will be on implementing reforms, improving tax compliance, strengthening government financial systems and building the institutional capacity necessary to sustain those improvements.

Gumbs acknowledged that the government's financial position remains vulnerable to unexpected obligations and external shocks, making stronger financial oversight and more effective revenue collection essential.

She indicated that modernization of the tax administration, better budget monitoring, stronger internal controls and comprehensive tax reform will remain central to the Ministry's efforts to safeguard public finances.

The Minister concluded that the objective is to build a government better equipped to manage public resources, deliver services and support St. Maarten's economic development while maintaining financial sustainability for future generations.

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