Economic Rescue Plan Slammed In Netherlands Antilles

by Amanda Banks, Tax-News.com, London

22 March 2002

The Government of St Maarten, in the Netherlands Antilles, has been criticised by the local media for its failure to act quickly or effectively enough in providing relief to the business community on the island.

The Executive Council this week proposed several relief measures for industry sectors which are struggling following the September 11 attacks and the subsequent global economic downturn.

Among the relief measures discussed by the Council, which comprises both Government and private sector representatives, were an eight month reduction of the room tax for hoteliers from 5% to 1%, the abolition of turnover tax, and the broadening of the region's tax base. The latter measure, according to the Executive Council, would allow the Government to reduce the existing surcharge on income tax.

However, a stinging editorial in The Daily Herald on Thursday suggested that the proposals: 'impress more for their good intentions than for their relief-generating force', and warned that the St Maarten Government: 'is still underestimating the extent and depth of the economic rot in our society'.

The report criticised the turnover tax and base-broadening suggestions, arguing that although they warrant consideration, they are likely to take a long time to come into effect, thus failing to generate the immediate relief needed by the jurisdiction's business sector.

The St Maarten-based newspaper also questioned whether the room tax reduction would be sufficient to change the minds of hoteliers considering closing down completely for the off-season, and warned that if the tourist industry suffers, the entire region will feel the effects.

'The Government should go back to the drawing table and try again,' the editorial concluded.

Recommended