People probably won’t be jumping for joy over today’s news of the intention to increase the motor vehicle tax by an average 18.18 per cent, almost one-fifth. Let’s face it; nobody really enjoys
paying more taxes, especially if they aren’t exactly thrilled about the performance of the public sector.
But everyone also knows the country is facing continued serious budgetary issues. Government was honest enough to admit that the law proposal is based on the need to take measures to structurally improve its finances.
It’s also true that what is often referred to as road tax has remained unchanged since the year 2000. According to the explanatory note of the draft ordinance, inflation in the last 15 years totalled 41 per cent, less than half of which is now thus being compensated for in this manner.
The retroactive aspect has to do with the fact that the actual deadline for compliance is normally not until the end of February, so the change in existing legislation conceivably could still be introduced during the first two months of 2016. On the other hand, an option is usually offered to pay as early as December, so it’s not entirely clear how that aspect would be handled this time around, while the possible impact on public transport tariffs remains very much to be seen.
One should keep in mind that the decision in question was made by the former Marcel Gumbs Cabinet and particularly former Finance Minister Martin Hassink, but his successor Minister Richard Gibson surely won’t be unhappy. After all, he has just announced the need for significant across-the-board cuts in spending to bring the total down to the income level of NAf. 445 million, saying all departments will have to “bite the bullet” (see related story).
It has been argued in the past that the motor vehicle tax and licence plate fee should go exclusively to upkeep and improvement of the local infrastructure, but in reality there is no working separate fund for such, so the proceeds are part of the general revenues. However, that doesn’t mean the planned hike can’t be accompanied by a sincere effort to tackle the most urgent problems on St. Maarten’s road system, so that motorists at least feel their money is doing them some good.
