Weekers proposes increasing tax free allowance on St. Maarten

POSTED: 07/19/11 11:41 AM

GREAT BAY/ORANJESTAD – Increasing the tax free allowance for people from Bonaire, St. Eustatius and Saba who shop in St. Maarten is one of the proposals Dutch State Secretary of Finance Frans Weekers has put forward as part of an attempt to provide tax relief to residents of the three Dutch public entities. The measures will also apply to Bonaire.

At the moment residents of the three public entities are only allowed to take home $175 dollars worth of goods. Taxes will be charged on anything above that amount. Weekers proposes to raise the amount to $500 for people 15 and older and raise it $50 to $150 for people below 15.

Raising the tax free allowance is one of seven steps that Weekers laid out ahead of a full scale review of the new tax system. He wants comments from the Executive Councils of the three islands by July 29. The other seven proposals include reducing the ABB in the restaurant sector from six to four percent, allowing contractors who are putting new buildings or who are doing renovations valued at more than $100, 000 to deduct already paid ABB on the import of materials and that the single tariff system on the importation of cars be shifted to a multi-tariff system. Under that multiple system people will pay 18 percent tax on the first $18, 000, 22 percent tax on cars between $18, 000 and $30, 000 and 30 percent on any vehicle above $30, 000.

The other three steps in Weeker’s draft plan is that the inflation rate of 4.1 percent will be corrected as of October 1 allowing for the tax free threshold and the deductions for seniors and children to increase, that the seniors deduction will increase from $200 to $1, 200 and the tax threshold on the customary wages of directors will be lowered from $20, 000 to $14, 000.

To offset the loss of revenue Weekers has proposed that the top tariff for income tax – 35.4 percent – be applied on income of $100, 000 per year instead of the current $250, 000. The State Secretary proposes further that the tax on dividend be raised from five percent to 15 percent. There is no mention in the draft on implementing a land/property tax.

The President of the Chamber of Commerce of Saba and St. Eustatius Koos Sneek said Monday the body will study the proposals and consult other private sector organizations and stakeholders to form a joint position to be presented to the governments of the two islands.

 

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