Amendment suggested by UP was already being worked on by current administration prior to July 2012

The Minister of Finance, Hon. Mr. Roland Tuitt, has been informed by the media of the draft legislation presented by UP Member of Parliament Jules James regarding the amendment of the tariff of the timeshare tax from a weekly rate of Nafl. 90 (equivalent to USD 50) to a daily rate of USD 10, resulting in a 40% tax increase.


It was probably unknown to the MP that the Government has already been working on a draft legislation to abolish the former Island-ordinances on timeshare-, room- and car rental tax by the end of this year. Starting January 2013, turnover derived from timeshare, hotel room and car rental will be subjected to Turnover tax. This amendment is a prerequisite to simplify the tax system, lowering the administrative burden and further improving the tax compliance.


Special rates in the TOT Ordinance

A specific provision regarding the daily rates for timeshare will be introduced in the TOT Ordinance, which will be differentiated by the size of the time share units. It is unreasonable that an owner of a small timeshare studio pays the same amount of tax as an owner of a 3 bedroom timeshare unit. The introduction of a differentiated daily rate has already been discussed with Mr. Jim Rosen, vice-chairman of the SMTA, earlier this year.

In comparison to other Caribbean jurisdictions, the current 5% roomtax of Sint Maarten is relatively low (Aruba 9,5%, Anguilla 10%, Antigua en Barbuda 8,5%, Bahamas 12%, Barbados 8,75%, Curaçao 7%, Dominican Republic 23%, Grenada 8%, Haiti 10%, Jamaica 15%, Trinidad en Tobago 10%). In the opinion of the Minister of Finance, there is still some room for increasing the rate without harming the tax competitiveness of Sint Maarten’s hotel industry.

Car rental companies are currently subjected to 5% car rental tax and Turnover Tax. As opposed to the hotels and timeshare, an exemption is not provided in the TOT Ordinance to prevent double taxation for car rental activities. As a result, car rental companies have to file a tax return for both the car rental tax and Turnover tax and are taxed twice on the same turnover. Abolishing the car rental tax will significantly lower the administrative burden and make the tax system fairer.


Financial impact study

Currently, a financial analysis is being made to determine the budgetary impact of this and other draft legislation on the government’s coffers.