The proposal by Prime Minister William Marlin to finance a youth employment fund with levies on the electricity tariff and gasoline rate sparked quite some reaction. One of the most prevalent comments
was why predominantly locals again will be required to foot the bill, rather than the millions of visitors received on an annual basis.
For starters, the latter also rent cars, so higher fuel prices and traffic will affect them too. Moreover, the resorts at which many stay could well pass on to their clients any structural increase in the utility bills.
Still, the discussion about tourists driving the local economy not contributing enough to the national treasury is an ongoing one. Several ideas to change this have come up over the years, but executing them remains a problem.
One example regards foreign condo owners who rent these out, but pay no local taxes on the money they make. Government rightfully decided to collect tax on those proceeds, but the implementation was completely botched.
To begin with, the persons concerned had been slapped with assessments on up to five years of back taxes for assumed rental income, without any indication they actually had rented their property to others. Objections and appeals predictably were filed left and right, rendering the entire measure practically useless.
What should have been done instead is to work closely with the local real estate sector, homeowners associations and the developers in question. That probably would have led to a realistic and feasible approach whereby these entities could help keep administrative track of this practice.
There are also longstanding plans to introduce a mandatory driver’s licence for guests who want to drive in St. Maarten, as several destinations in the area already have done. Here again, it’s important to involve car rental agencies to ensure an efficient process.
Finally, when either an excise or higher turnover tax was suggested on alcohol and tobacco products, people were quick to warn this would jeopardise the duty-free image of the island. Truth be told, these items indeed popular among visitors are so much cheaper than elsewhere that a small hike probably would hardly make an impact.
In conclusion, there are some existing options that may be worth revisiting, but in a different, better manner. Old wine in a new jacket, so to speak.
