The law of the strongest?

The strongest is never strong enough to always remain lord and superior, unless he transforms his (brutal) power into justice and obedience into duty. Therefrom the law of the strongest. To give way to (brutal) power is an act of need, not of will; it is at most an act of prudence.

Is levying taxes ‘the law of the strongest’?

Article 155 paragraph 1 of our Constitution stipulates that taxes are levied by law, which law regulates the tax burden, rates, exemptions and guarantees for taxpayers.

By law this means, a law passed by the National Assembly. If we now assume that in our system all tax laws have been passed by our parliament, then taxation is not a ‘right of the strongest’.

Taxation becomes ‘the law of the strongest’ when, in the implementation of the provision of Article 155 paragraph 1 of our Constitution, no or insufficient attention is paid to, among other things, the guarantees for taxpayers. Examples: ex officio tax assessments that are not motivated, not handling appeals or handling them for too long, the fact that there is no appeal body, not responding by the tax authorities on requests or questions from taxpayers, threatening with high tax assessments, including penalties, imposing a fine without proper justification, misuse of powers in taxation, etcetera. Yes, then taxation is the right of the strongest.

We trust that the announced tax measures will also pay attention to safeguards for taxpayers, so that we can rightly say that with us taxation is not a law of the strongest.

Conflict or decisiveness?

One of the measures announced by the government is the so-called discount of SRD 50, - per month in wage tax. See, for example, newspaper Star News of 20 January 2011. A number of employers immediately implemented the discount of SRD 50 per month within their companies after the announcement of this measure. The government, in this case the tax authorities, has also adjusted its systems and the discount is already being granted for 2011. The tax credit is included in the tax return form ‘provisional income tax return 2011’ under heading 13, calculation of income tax. This means that a discount of SRD 600 must be applied to the calculated income tax (normal rate).

You could argue that both the employers who have already implemented this discount and the tax authorities are decisive.

But how to deal with this situation, where the relevant laws in which this discount must be regulated have not yet been changed? We have just seen that article 155 paragraph 1 of the Constitution prescribes that exemptions and rates must also be regulated by law. Should we view this as an act of decisiveness and not an act of unlawfulness because it benefits the taxpayer? Is unlawful acting justified when it benefits us? Can we rely on a justified confidence that the change in the law is on the way and thus does not conflict with our legal principles? If so, we would also have considered it fair and / or decisive if the measure did not benefit the taxpayer?

Casino tax

On March 31, 2011 one of the announced tax measures, the 100% increase in the rates in the Casino Tax Act, was passed by the National Assembly. This amendment will enter into force on the first day of the month following the announcement in the Official Gazette of the Republic of Suriname. This declaration has not yet reached us.

Wealth tax

We were confronted with the question of whether the obligation to declare wealth tax is new. Answer: no.

The Wealth Tax Act dates from 1944. This Act regulates the wealth tax liability for persons living in Suriname and for persons living outside Suriname and possessing certain assets in Suriname. This tax is a direct tax and is levied upon assessment. This means that the inspector must first impose an assessment before any tax liability arises. If you have received a tax return form, you are obliged to complete it without reservation and truthfully and submit it to the tax authorities. The rate for the wealth tax is 3 ‰ of your net assets. An exemption of SRD 120,000 applies to married persons and SRD 100.00 to unmarried persons. So complete your wealth tax return form and submit it to the tax authorities.

S.A.S. period

The S.A.S period is in full swing. Private individuals who are required to file a tax return must submit their provisional income tax return 2011 by 15 April 2011 at the latest. If you owe tax according to the calculation, you must pay it in four installments, when submitting the provisional tax return no later than 15 April 2011, 15 July, 15 October and no later than 31 December 2011.

You must submit the final 2010 income tax return no later than April 30, 2011 and if you owe tax according to the tax return, you must pay it in one go.

For bodies (limited liability companies, foundations, etcetera) the provisional tax return must be submitted no later than April 15, 2011, while the final tax return 2010 must be submitted no later than June 30, 2011. Comply with your tax return and payment obligations on time and avoid interest and fines, but above all extra worries.

If you have any questions or comments about the content of this newsletter, please do not hesitate to contact us. We are happy to serve you.