The dividend withholding tax is not a burden nor a surprise measure and it will not have any adverse effect on the average St. Maarten tax payer, Minister of Finance Ms. Marinka Gumbs stressed in a statement to The Daily Herald on Monday.
Responding to critics of the measure, which the Minister announced during the recent Central Committee meeting of Parliament to discuss the updated 2025 budget, she revealed that discussions with stakeholders on enacting the existing dividend withholding tax began in May 2022, long before she took office.
“The local business community has been informed throughout this process,” she noted. “The implementation of this tax, which has been on the books, is a deliberate step within the Government’s broader fiscal strategy to broaden the tax base, thereby creating room for future tax relief, which will include a reduction in the profit tax rate and adjustments to wage tax rates. The ultimate goal is to provide meaningful tax relief to the citizens of Sint Maarten.”
According to Minister Gumbs, “if we truly want to improve critical social sectors such as education, healthcare, infrastructure and mental health services, we must acknowledge that sustainable progress demands meaningful investment in Sint Maarten.”
“For too long,” she continued, “difficult but necessary decisions were delayed, often for political convenience. But we cannot afford to keep postponing action while expecting different results. To provide genuine tax relief to our people, we must broaden our revenue base and ensure that those who benefit from our economy contribute their fair share.”
She said those who call the implementation of the dividend tax an undue burden on the local economy are grossly and perhaps deliberately misleading the people.
“In fact, under St. Maarten’s tax framework, dividend withholding tax paid by domestic taxpayers can be fully credited against their income tax or profit tax obligations,” Minister Marinka Gumbs further explained. “As such, there is no increase in the total tax burden for local shareholders or businesses.”