SINT MAARTEN (GREAT BAY) - The dividend withholding tax is not a burden nor a surprise measure and it will not have any adverse effect on the average St. Maarten tax payer, Minister of Finance Ms. Marinka Gumbs stressed in a statement to The Daily Herald on Monday.
Responding to critics of the measure, which the Minister announced during the recent Central Committee meeting of Parliament to discuss the updated 2025 budget, she revealed that discussions with stakeholders on enacting the existing dividend withholding tax began in May 2022, long before she took office.
“The local business community has been informed throughout this process,” she noted. “The implementation of this tax, which has been on the books, is a deliberate step within the Government’s broader fiscal strategy to broaden the tax base, thereby creating room for future tax relief, which will include a reduction in the profit tax rate and adjustments to wage tax rates. The ultimate goal is to provide meaningful tax relief to the citizens of Sint Maarten.”
According to Minister Gumbs, “if we truly want to improve critical social sectors such as education, healthcare, infrastructure and mental health services, we must acknowledge that sustainable progress demands meaningful investment in Sint Maarten.”
“For too long,” she continued, “difficult but necessary decisions were delayed, often for political convenience. But we cannot afford to keep postponing action while expecting different results. To provide genuine tax relief to our people, we must broaden our revenue base and ensure that those who benefit from our economy contribute their fair share.”
She said those who call the implementation of the dividend tax an undue burden on the local economy are grossly and perhaps deliberately misleading the people.
“In fact, under St. Maarten’s tax framework, dividend withholding tax paid by domestic taxpayers can be fully credited against their income tax or profit tax obligations,” Minister Marinka Gumbs further explained. “As such, there is no increase in the total tax burden for local shareholders or businesses.”
“This tax simply aligns the moment of taxation with the year in which dividends are paid, bringing the revenue forward but not increasing the amount owed,” the Minister emphasized.
The primary effect of the implementation of this legislation will be on foreign investors and shareholders, the Minister continued and, according to her, “even for these foreign parties, St. Maarten’s dividend withholding tax can be credited in their country of residence generally to avoid double taxation.”
“Let me make it abundantly clear: the people of St. Maarten cannot continue to shoulder the financial burden of the country alone,” Minister Gumbs stated. “With the forthcoming implementation of the dividend withholding tax, foreign investors and shareholders who benefit from doing business in and with St. Maarten, will also be contributing their fair share. If they are profiting from our economy, it is only fair and just that they also contribute to its development and resilience.”
The Minister of Finance stated that the implementation of this legislation is “a step toward fairness and shared responsibility.”
“To suggest that this measure unduly targets local taxpayers is not only incorrect, but could be seen as a mischievous distortion of the facts,” she said.
“The dividend withholding tax does not represent a new financial burden,” the Minister reiterated. “Rather, it is a step toward fairness and modernization, in line with regional best practices. Comparable systems exist in Aruba, Barbados, Jamaica, and the BES islands.”
Minister Marinka Gumbs emphasized: “The implementation of this legislation is part of a carefully considered tax reform trajectory. It strengthens our revenue structure, ensures fairer contributions from foreign investors, and sets the foundation for broader tax relief in the very near future. The public deserves accurate information, and I am committed to a transparent implementation of these reforms.”
The Minister further noted that it is quite remarkable that some Members of Parliament, particularly those in Opposition, consistently call for new revenue-generating measures, yet when such measures are introduced, they are immediately criticized.
“I understand the politics of it. But I also know that real leadership means having the courage to make tough decisions, even when they may not be popular,” she said, adding, “It takes resolve to do what is necessary for the long-term benefit of our country, and I am committed to making those decisions in the best interest of the people of St. Maarten.”
The Minister concluded by affirming that both she and her Ministry remain open to constructive dialogue and will continue to provide timely updates as preparations for the implementation of the dividend withholding tax progress, an initiative expected to generate millions annually for Country Sint Maarten.
The enforcement of this measure is targeted for January 1, 2026, and it will be incorporated in the 2026 national budget.
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