The People’s Progressive Alliance (PPA) led by Gracita Arrindell has suggested a 2.5 per cent real estate tax and a flat income tax of 10 per cent (see related story). Not everyone may agree, but at least the party has come out with some concrete proposals.
United St. Maarten party (USp) leader Frans Richardson too commented on the issue
with a release published in Saturday’s opinion pages. He said taxes appearing in the existing fiscal regulations although currently not executed still scare away investors. The Member of Parliament (MP) mentioned “not tweaking here and there, but real changes to a modern tax structure,” yet stopped short of providing additional details.
St. Maarten Christian Party (SMPC) at the recent opening of its headquarters and presentation of its manifesto referred to “simplifying the tax system for improved compliance.”
However, PPA was quite specific and as such is sticking its proverbial neck out. After all, the discussion on a property tax in St. Maarten is nothing new, but up to now it has always failed to materialise due to fierce opposition.
The latter is understandable, because such a levy would affect everyone who owns houses or apartments, no matter how small or big. Moreover, people who rent these out would be paying tax on both the related earnings and the value of their property.
At the same time, it’s a known fact that many foreigners with homes on the island also put these up for rent when not here and don’t pay a dime in taxes on those revenues, simply because they aren’t residents. Efforts were made a few years ago to introduce a so-called condo tax to tackle this problem, but it backfired because retroactive assessments were sent out blindly without evidence the people involved had actually made money with their local accommodations.
An across-the-board real estate tax would certainly address that shortcoming, but whether it can indeed produce NAf. 136 million on an annual basis remains to be seen. The same goes for the argument that this would allow for a general income tax rate of just 10 per cent.
Nevertheless, PPA deserves credit for presenting defined plans rather than vague talk to the voters ahead of the September 26 elections. Whether that will translate to support at the polls is another matter.
