Readers could not help but smile over the suggestion by caretaker Finance Minister Richard Gibson to create a profit-tax-free zone in Philipsburg. While the idea is not necessarily bad, under the current circumstances it does seem a bit amusing.
After all, to pay profit tax one must first – you guessed it – earn a profit. The reality is that in any case this year very few downtown merchants will be able to break even, and most are likely end up in the red.
Moreover, also 2018 promises to be very challenging for obtaining positive results due to a sharp decline in sales that is expected to persist throughout the normally busy period during the first four months of the year. This is certainly the case for stayover tourism, with many major resorts to stay closed the entire winter.
So, while such an incentive might be an attractive option in the future, it is not going to give much short-term relief to the business community. A meaningful recovery of the local hospitality industry can, but that will take a while.
What the Dutch side’s economy requires right now is the kind of boost that significant financial aid from the Netherlands would provide, along with insurance monies. The income this creates should compensate at least somewhat for the considerable loss of revenues from visitors.
That is the stark reality the destination currently faces as it gets ready to celebrate St. Maarten/St. Martin Day. SXM strong yes, but not without continued assistance from abroad. The social need remains enormous and it’s important for politicians both here and in The Hague to understand this.
Make no mistake, the island is going through a truly difficult situation and things won’t get much better in the days and weeks to come. Desperate times demand decisive action.
