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Call For Tax Certainty In St Maarten

by Amanda Banks, Tax-News.com, London

21 September 2011


Responding to forecasts of further economic contraction in Saint Maarten, the island's Hospitality and Trade Association (SHTA) has called for the government to resolve uncertainty over the future tax regime, which it has warned is deterring investment.

The statement is in response to an economic report from the St Maarten Central Bank that an economic recovery for the island will only occur in 2012.

The SHTA statement says that the economic troubles for the island have been exacerbated by low consumer confidence, lack of international awareness of St Maarten as a tourism destination and financial services location, a weak investment climate, and a lack of clearly articulated plans.

The Association stated that: “While the SHTA agrees that a tax system that is simpler, more transparent and more fairly distributed is necessary, the current uncertainty about the future tax system is a high barrier to stimulating increased investment from current or future investors."

“Six months ago, upon the request of the tax committee, the SHTA submitted a position paper to the tax committee and ministry of Finance but has yet to receive feedback or further discussion. Even though a new proposal was to be put forward to stakeholders in June, it's now September and we've heard nothing except rumors that the temporary 2% TOT (turnover tax) increase will now be extended for another year."

“This lack of confidence in the economy, will result in investors adopting a wait-and-see attitude towards making capital improvements and other investments. This lower spending will translate into less economic activity, which will also mean less revenue for government and for the community in general."

“The lack of awareness is another deterrent to stimulating investor confidence. In times of economic distress, the community needs to feel that the political leadership has a clear vision and action plan to restore economic activity."

“The SHTA feels that immediate and dramatic action is needed to turn the economy around.”

TAGS: tax | investment | fiscal policy | financial services | international financial centres (IFC) | offshore | Saint Maarten | services

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