PHILIPSBURG:--- As your representative in Parliament, let's take a deeper look at a critical economic issue facing our island: the proposed 10% dividend withholding tax, slated for implementation on January 1, 2026. While the stated intention might be to broaden our tax base, a closer examination reveals that this measure, as it stands, poses significant risks to our fragile economy, particularly for our local businesses and our long-term competitiveness.

We are a Small Island Developing State (SIDS), inherently vulnerable due to our small size and reliance on a narrow economic base, predominantly tourism. Our limited capital markets mean that local business reinvestment is not just important; it's the lifeblood of our economy. It’s how businesses grow, create jobs, and foster innovation. Any policy that hinders this vital reinvestment must be scrutinized thoroughly.

The Reality is, It’s Not Just for Foreigners

There’s a dangerous misconception being spread that this 10% dividend withholding tax (DWT)will primarily impact foreign investors and that for local shareholders, it’s simply a creditable advance payment. Let me be clear: while the tax may theoretically be creditable against a local shareholder's income or profit tax, the economic reality on the ground, especially for our micro, small, and medium-sized enterprises (MSMEs), is far more nuanced and concerning.

Consider this: our businesses already face a substantial Corporate Profit Tax (CPT) of 34.5%. When you add this new 10% dividend withholding tax on top, the effective combined tax burden on distributed profits for a company becomes a whopping 41.05% ($100 profit - 34.5% CPT = $65.55 remaining. A 10% DWT on $65.55 = $6.555. Total tax = $34.5 + $6.555 = $41.055). This is a substantial chunk of profit being siphoned away before it can be reinvested into the business or stimulate further economic activity.

Even if technically creditable, the imposition of a withholding tax means an immediate cash outflow for businesses at the point of dividend distribution. For many of our local MSMEs, retained earnings are their primary source of capital for expansion, purchasing new equipment, training staff, or simply weathering economic downturns. Forcing an earlier payment, even if offset later, directly reduces their immediate liquidity and hinders their ability to reinvest. This is not just a theoretical accounting exercise; it’s a tangible hit to the cash flow of the very businesses we rely on to drive our economy. To claim this primarily impacts foreigners ignores the vast majority of our local business landscape.

The Minister's Comparison and the Reality

The Minister of Finance has cited regional comparisons to justify this new tax, suggesting that a dividend withholding tax is common practice among our neighbors. While it's true that some regional countries do levy such a tax, a closer look at the overall tax landscape reveals that Sint Maarten is quickly making itself an outlier, especially when considering the complete picture of corporate taxation and reinvestment incentives.

Consider our neighbors. Aruba, for instance, boasts a more competitive Corporate Income Tax (CIT) of 22% (significantly lower than our 34.5%) and offers incentives like a 10% investment allowance, despite a 10% dividend withholding tax for individuals. Curaçao also maintains a CIT of around 22%, generally levies no withholding taxes on dividends for non-residents, and provides aggressive incentives, including tax holidays as low as 3% for significant investments.

Looking further, Barbados employs a tiered CIT system with a general rate around 9%, much lower than ours. While they have a 12.5% dividend withholding tax for resident individuals, they offer a reinvestment exemption, and for non-residents, the DWT is often 5%. They also provide investment allowances up to 40% for certain industries. The BES Islands (Bonaire, Sint Eustatius, Saba) present a remarkably different system; most local businesses face no traditional corporate profit tax, instead imposing a 5% Revenue Distribution Withholding Tax on dividends, and crucially, offering a "reinvestment reserve" that defers taxation on profits, directly incentivizing reinvestment.

When we compare our proposed 41.05% combined tax on distributed profits to these regional examples, it becomes starkly clear that Sint Maarten is quickly making itself an outlier. Our existing 34.5% corporate tax is already one of the highest in the region, potentially acting as a deterrent to foreign direct investment and local business expansion. Adding a new 10% dividend withholding tax, even with the promise of future creditability, further damages our image as an attractive place to do business and encourages capital flight rather than reinvestment.

Why the Timing is All Wrong

The timing of this proposed tax could not be worse. Our economy is still recovering from the dual shocks of Hurricane Irma and the COVID-19 pandemic. Businesses are struggling with rising costs, supply chain issues, and the need to rebuild and innovate. Imposing an additional tax burden, whether directly or through cash flow reduction, at such a critical juncture risks stifling the very recovery we are striving for. This measure could lead to reduced business reinvestment, meaning less capital for expansion, fewer jobs, and slower economic growth. It risks eroding investor confidence, both locally and internationally, potentially leading to capital outflows and deterring new investments. Ultimately, it will result in diminished long-term competitiveness; if our neighbors offer lower taxes and stronger incentives, businesses will naturally gravitate towards those jurisdictions.

Smart Tax Reform for Sint Maarten

Instead of adding another layer of taxation that burdens our local businesses, we should be pursuing intelligent tax reforms that genuinely stimulate our economy. I have consistently advocated for an alternative approach, one that truly understands the unique challenges of a SIDS.

Firstly, we must focus on lowering the Corporate Profit Tax. We need to reduce our current 34.5% corporate tax rate. On June 3^rd I submitted a draft initiative law, with amendments to the Profit Tax Law which addresses this. This law proposes a tiered profit tax system: a significantly lower rate, perhaps 15%, for businesses earning up to ANG 600,000, which would provide crucial relief and incentive for our small and medium sized enterprises that form the backbone of our economy. For larger businesses, a more competitive rate, such as 20%, would bring us more in line with our regional competitors and encourage larger investments.

Secondly, instead of taxing dividends, let's implement targeted reinvestment incentives. We could offer tax credits for job creation or for businesses investing in specific strategic sectors. Furthermore, deductions for employee wages and training costs, potentially at 150% as I have previously suggested, would encourage businesses to invest in their human capital and expand their workforce.

Finally, a significant portion of our potential tax revenue is lost due to inefficient collection and a large informal sector. Instead of introducing new taxes, let's prioritize improving tax compliance and efficiency. This means strengthening tax administration to ensure existing laws are properly enforced, simplifying tax processes to make compliance easier for businesses, particularly MSMEs, and broadening the tax base by bringing more informal businesses into the formal economy through education and support, rather than new levies.

We need a comprehensive fiscal strategy that fosters economic growth, encourages local business reinvestment, and makes Sint Maarten genuinely attractive for both domestic and foreign capital. This means even if we bring laws in batches it needs to align. A 10% dividend withholding tax, on top of an already excessively high corporate profit tax, is a step in the wrong direction. Let us choose a path of smart, growth oriented tax reform that benefits all Sint Maarteners.

PHILIPSBURG:--- Prime Minister Dr. Luc Mercelina’s recent condemnation of Members of Parliament for allegedly attempting to destabilize the governing coalition has sparked controversy, with critics pointing out a glaring contradiction in his stance. Dr. Mercelina, who now champions stability and condemns political disruption, was himself instrumental in dismantling a government in 2019, raising questions about the consistency of his principles.

In a strongly worded statement earlier on Wednesday, Prime Minister Mercelina declared, “I categorically reject any and all attempts to undermine the integrity of this coalition Government.” He further accused any Member of Parliament engaging in such actions of “turning their backs on voters” and “undermining our democracy.” However, political observers and opponents have been quick to highlight that Dr. Mercelina, as a key political figure in 2019, played a pivotal role in toppling the then-government, an act that many viewed as a significant source of instability at the time.

A History of Political Disruption

Dr. Mercelina’s involvement in the 2019 government collapse is well-documented. As a rising political leader, he justified his actions then as necessary for the country’s progress. However, his current rhetoric, which frames any attempt to disrupt the coalition as a betrayal of democracy, has been labeled hypocritical by critics.

“Dr. Mercelina’s statements are a classic case of ‘do as I say, not as I do,’” said one political analyst. “He was once the architect of political upheaval, and now he’s condemning others for actions he himself has taken in the past. It’s a contradiction that undermines his credibility.”

Internal Struggles Within the URSM

Adding to the Prime Minister’s challenges is growing speculation about internal discord within his own party, the Unified Resilient Sint Maarten Movement (URSM). Reports suggest that tensions have been brewing between Dr. Mercelina and his Minister of Public Health, Social Development, and Labor (VSA), Richinel Brug. While the exact nature of the conflict remains unclear, insiders claim it stems from disagreements over key policy decisions and governance approaches.

Critics argue that instead of focusing solely on external threats to the coalition, Dr. Mercelina should address the issues within his own party. “The Prime Minister needs to be transparent about the situation with Minister Brug,” said a political commentator. “If there are internal problems within the URSM, the public deserves to know. Ignoring these issues only fuels speculation and weakens the Government’s image.”

Calls for Transparency and Accountability

As the leader of the coalition, Dr. Mercelina has positioned himself as a champion of stability, integrity, and transparency. However, his past actions and the unresolved tensions within his party have cast a shadow over his leadership. Many are calling on the Prime Minister to address these contradictions and provide clarity on the state of his coalition.

“Stability starts at home,” said one Member of Parliament. “If the Prime Minister wants to preach unity and focus on nation-building, he must first ensure that his own house is in order.”

As St Maarten navigates critical challenges, including an energy crisis and healthcare reforms, the public will be watching closely to see whether Dr. Mercelina can rise above the political noise and lead with the integrity and transparency he so often advocates.

Click here to view the first motion of no confidence presented by Dr. Luc Mercelina in 2019 against then Minister of VSA Emil Lee.

PHILIPSBURG:--- MP Darryl York's recent inquiry into Sint Maarten’s governance, public welfare, and infrastructure policies raised significant questions, illuminating the critical issues facing the island. From disaster resilience to prison conditions and environmental policies, the discussions between MP York and the Council of Ministers during the Central Committee meeting last week provided valuable insights into the island's priorities and challenges for 2025.

Disaster Preparedness and Funding

One of the central concerns raised was the country's ability to manage disasters effectively. MP York questioned the financial readiness for securing external law enforcement support during crises and sought details about St Maarten’s disaster insurance coverage.

The Council of Ministers outlined the government’s reliance on the Caribbean-led insurance initiative, CCRIF, which offers coverage for three types of disasters:

• Tropical cyclones ($842,100)

• Earthquakes ($77,641)

• Excess rainfall ($538,175)

While the total insured amount exceeds $1.45 million, the Council clarified that these funds are separate from the government’s disaster calamity fund and are disbursed based on the catastrophe’s modeled impact. This framework ensures financial support during major natural disasters but highlights the need for continuous evaluation of disaster response strategies to protect St Maarten’s residents fully.

Infrastructure and Beautification Projects

MP York also raised questions regarding key infrastructure projects, including road resurfacing, zoning plans, and the Philipsburg beautification initiative. The dialogue revealed several ongoing efforts and challenges:

1. Philipsburg Beautification Project:

• The replacement of bricks and drainage system upgrades fall under the Ministry of VROMI’s technical domain, while TEATT oversees the conceptual phase.

• Future budgets, potentially for 2026, may incorporate these infrastructural needs, reflecting a phased approach to the initiative.

2. Monument Preservation and Clem Labega Square Development:

• York emphasized the importance of preserving historical monuments as part of the beautification strategy. The Council acknowledged their role and emphasized aligning square development plans with the overall vision for Philipsburg.

3. Road Projects and Erosion Issues:

• Questions about Sucker Garden Road, LB Scott Road, and road resurfacing highlighted concerns about planning, materials, and timelines. Additionally, erosion in hilly areas like South Reward and Mary Fancy remains an unresolved issue requiring urgent attention.

The exchanges underscore the interconnected nature of infrastructure projects and the need for a cohesive strategy to tackle urban challenges effectively.

Prison Conditions and the Justice Sector

With public welfare a prominent focus, MP York’s questions on prison conditions revealed alarming gaps in inmate care. Reports of inmates sleeping on floors due to extreme heat indicate substandard conditions that risk violating human rights. The Council noted that under the Kingdom Charter, the Netherlands bears ultimate responsibility for human rights oversight.

Other justice-related queries included:

• A delay in filling critical vacancies, such as the Head of Judicial Affairs, which is currently in the HR selection process.

• There is a pressing need for better transportation systems for inmate movement, with court-mandated penalties for delays that potentially impact the Ministry of Justice’s budget.

• Limited funding for prison staff training, with further plans contingent on collaboration with external entities like the UNODC.

By examining these systemic issues, MP York called for urgent reforms in prison administration, strengthening the justice sector’s framework to uphold human dignity and efficiency.

Education Policies and Mental Health

MP York expressed significant concern over the alignment of education policies with the labor market, inclusivity, and mental health support. Among the key issues raised:

• Sustainability of Inclusive Education: Ensuring long-term support for special needs students remains a critical challenge.

• Monitoring Sports Programs for Community Engagement: Questions regarding accountability for sports program outcomes suggested gaps in impact assessment.

• Mental Health Policy Updates: Referring to earlier motions, MP York requested updates on the implementation of mental health initiatives.

The Council emphasized the importance of fostering resilience in children and educators through projects like the Child Resilience and Protection Program (CRPP). Still, it acknowledged the need for robust monitoring to measure their success.

Environmental Concerns and Waste Management

The environmental challenges facing Sint Maarten include stormwater flooding, erosion, and waste management. York called for clarity on:

• Stormwater Pumps: While some pumps are operational, efforts to install delayed systems have been hindered by long-standing logistical issues.

• A sustainable waste management and recycling strategy, complemented by public education and incentives, is crucial for addressing environmental degradation.

• Retention Ponds and Erosion: The correlation between retaining rainwater and tackling hill erosion requires a cohesive, long-term plan.

The Council acknowledged the urgency of these issues, highlighting the need for resource allocation toward environmentally friendly development.

Accountability in Governance and Legislative Processes

MP York’s line of questioning frequently returned to themes of governance and accountability. For example:

• Building Permit Backlog: The backlog of pending permits and the status of bribery investigations within the permits department were raised as concerns.

• Stakeholder Engagement for Zoning Plans: Detailed updates on the zoning plan's status and public consultation processes were requested to ensure transparency.

• Timeliness of Legislative Processes: Faction members noted delays in securing advice from entities like the SER, emphasizing the need for tighter monitoring of parliamentary timelines.

These discussions revealed critical areas where governance improvements are essential to ensure public trust and operational efficiency.

Economic Development and Festivals

Carnival and the Soul Beach Festival featured prominently in discussions about cultural and economic benefits. MP York questioned the quantification of returns on government investment in such events and the transparency of decision-making processes. The Council stated that the economic impact of such events extends beyond direct financial gains, contributing to the growth of cultural identity and tourism.

Concluding Thoughts

MP Darryl York’s inquiries have shown a spotlight on priority issues that St Maarten must address to ensure sustainable development and improve public welfare. From disaster preparedness to prison conditions, each challenge underscores the need for informed policies, transparent governance, and stakeholder collaboration. Moving forward, the critical question remains whether these discussions will translate into actionable change for the people of Sint Maarten.

PHILIPSBURG:---  St. Maarten's governance landscape has faced significant scrutiny, with questions about policy execution, financial accountability, and institutional challenges highlighting key areas for government attention. MP Omar Ottley's inquiries and the Council of Ministers' responses provide insight into the systemic issues affecting governance and their impacts on the public.

Policy Implementation and Delays

One of the recurring issues in St Maarten is the delayed implementation of critical policies, which inhibits the government's ability to address pressing societal needs effectively. MP Omar Ottley raised concerns about how policies linked to social welfare, healthcare advancements, and infrastructure improvements are handled. The Council of Ministers acknowledged delays, attributing them to shortcomings in inter-ministerial coordination and procedural bottlenecks.

For example, Ottley highlighted the stalled development of housing projects intended to address affordability and accessibility challenges. The Council cited prolonged land acquisition phases and constraints in legal review processes as primary causes of delay. While this acknowledgment is a step toward transparency, it underscores the need for administrative reforms to accelerate project rollouts.

Financial Accountability Under Scrutiny

MP Ottley also questioned the effectiveness of financial oversight within government entities, particularly with regard to public spending and the allocation of budgets for critical services. The Council of Ministers pointed out that while audits are conducted, the lack of streamlined processes often results in overlapping expenditures and delayed project approvals.

A specific area of concern was the budget allocation for healthcare enhancements. MP Ottley questioned why promised investments in modernizing medical facilities had yet to materialize fully. The Council responded that funding challenges had compounded due to limited revenue streams and higher-than-expected costs related to other priority sectors. This highlights an urgent need to reevaluate fiscal strategies to avoid neglecting fundamental services like healthcare.

Governance Challenges in Inter-Ministerial Coordination

Institutional inefficiencies were another focal point of MP Ottley’s inquiries. The lack of synergy among ministries was cited as a barrier to proactive governance. For instance, Ottley queried the Ministry of Public Health and the Ministry of VROMI about joint initiatives on public health infrastructure, noting the absence of tangible progress despite allocated funding.

The Council admitted to ongoing coordination challenges and pledged to employ digital platforms aimed at improving data integration and communication between ministries. However, the structural complexities underlying these difficulties require longer-term strategies, such as redefining the mandates of overlapping agencies and improving leadership accountability.

Social Welfare and Public Well-Being

MP Ottley's emphasis on social welfare programs revealed deeper governance issues stemming from inefficiency and lack of targeted action. Questions about subsidies for low-income families, enhanced social services, and welfare program evaluations revealed significant gaps.

The Council's responses acknowledged that certain subsidies had been delayed but cited procedural red tape and logistical issues as major hindrances. Though there is a plan to expedite subsidy releases and review welfare programs, Ottley's pointed queries highlight the pressing need for improved responsiveness within this sector.

A Roadmap for Progress

The discussions prompted by MP Ottley underline several critical takeaways and possible solutions for Sint Maarten’s governance challenges:

1. Streamlined Policy Execution: Clear timelines and effective project management systems must be established to ensure timely policy implementation.

2. Enhanced Budgetary Oversight: Transparent audit frameworks should assess public spending allocation to prevent inefficiencies and mismanagement.

3. Strengthened Inter-Ministerial Collaboration: Ministries must adopt cohesive strategies and robust communication platforms to facilitate holistic governance.

4. Boosting Social Welfare Initiatives: Proactive measures, including reducing bureaucratic delays, can ensure timely support for those in need.

Final Thoughts

The dialogue between MP Omar Ottley and the Council of Ministers sheds light on both governance shortcomings and the potential for reform in St Maarten. By addressing inefficiencies and prioritizing the needs of its citizens, the government can rebuild trust and establish a framework for sustainable development. This is a critical moment for St Maarten to demonstrate accountability and resilience in navigating its challenges.