St Maarten Seeks To Reduce Its Income Tax Burden

by Amanda Banks, Tax-News.com, London

02 November 2005

Saint Maarten Democratic Party member Maria Buncamper-Molanus has announced that premiums for comprehensive insurance will once again become tax deductible as part of a broader package of measures aimed at cutting the income tax burden.

The amendment has been included in an initiative amending the federal income tax ordinance which was approved by parliament last week.

This initiative seeks to bring about a 12.5% reduction in income tax on wages in two phases, and a reduction in tax on interest earned from savings accounts at local banks to 5% from 10%.

The proposal to include the deductibility of comprehensive insurance premiums was introduced by Buncamper-Molanus late last year with the unanimous support of lawmakers.

The government decided to eliminate insurance premiums from the list of items that could be deducted from tax several years ago in a bid to lift revenues. However, the unpopular measure added to the cost of obtaining mortgages to buy homes, particularly after Hurricane Luis led to a dramatic rise in premium rates in 1995.

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