GREAT BAY-- Minister of Finance Marinka Gumbs has acknowledged that St. Maarten has not yet reached the full tax reform phase of its financial modernization agenda, while outlining the work underway on outstanding legislation, revenue measures and tax administration improvements.
Responding to pointed criticism from Democratic Party Member of Parliament Dimar Labega during the 2027 national budget debate on Monday, Gumbs confirmed that the Ministry remains in the stabilization phase, with elements of the repair phase already underway, and provided updates on several measures Labega had questioned during the first round of parliamentary deliberations.
Labega, a member of the same political party as Gumbs, had challenged the pace of tax reform, the absence of implementation timelines and what he considered insufficient progress on revenue-generating initiatives. Although he acknowledged improvements in the timely submission of the national budget, he questioned whether government had developed a comprehensive strategy beyond modernizing the Tax Administration.
In her response, Gumbs explained that the Ministry's approach remains structured around three phases: stabilizing, repairing and reforming the tax system. The immediate priorities are improving compliance, strengthening collections and ensuring government receives revenues already legally due. Broader reforms involving profit tax, wage tax and other fiscal measures would follow as the necessary financial assessments and policy decisions are completed.
The Minister identified six initiatives planned for 2027, including a compliance baseline program, improvements to the taxpayer register, expanded digital services, improved payment processing, filing relief for qualifying AOV pensioners and stronger financial reporting and public accountability.
She also confirmed that work is underway to obtain and analyze information from existing tax administration databases to support future legislative reforms. A data-cleaning team has begun working with copies of the relevant databases and will conduct the necessary queries once its initial assessment of the systems is completed.
Gumbs Acknowledges Government Must Submit Legislation
One of Labega's criticisms concerned repeated references to Parliament's responsibility to approve legislation when several proposed measures had not yet been submitted by government. Gumbs acknowledged that the MP was correct that government must first prepare and submit legislation before Parliament can debate and approve it.
However, she also maintained that both government and Parliament have responsibilities in moving legislation through the required process. She noted that she had appeared before Parliament more than a dozen times during 2026 to address financial matters and legislation.
The Minister expressed willingness to engage Parliament earlier in the development of proposed laws, explaining that such consultations could help identify concerns before extensive legislative drafting takes place.
She also acknowledged the work undertaken by her predecessors at the Ministry of Finance, specifically recognizing Labega's contributions during his tenure.
Regarding coordination across government, Gumbs confirmed that discussions had taken place with fellow ministers concerning existing revenue collections and possible new measures. She said that during the second quarter of 2026, she provided ministers with detailed information on their ministries' revenue performance, including comparisons with budget projections and previous collection periods, to assist them in identifying areas requiring improvement.
Dividend Withholding Tax and Visitor Tax Updates
Responding to Labega's questions about the delayed dividend withholding tax, Gumbs explained that although the legislation formed part of the former Netherlands Antilles tax framework, it had never entered into force in St. Maarten.
Following a parliamentary motion, government decided to review the proposed introduction of dividend withholding tax alongside a possible reduction in profit tax, allowing the financial effects of both measures to be assessed together.
The Minister said work on the proposed profit tax reduction is being finalized and that she intends to return to Parliament during the first quarter of 2027 to present the combined measures and their financial implications. No revised implementation date has been established.
Gumbs also confirmed that the proposed visitor tax legislation is undergoing its final internal review at the Department of Legal Affairs and Legislation. Subject to completion of that review, the Ministry intends to submit the draft to the Council of Ministers and subsequently the Council of Advice before the end of November.
The legislation would then return to Parliament following the advisory process and any necessary revisions.
Regarding separate legislation addressing Airbnb and other short-term rental accommodations, Gumbs said the proposal falls under the responsibility of the Ministry of TEATT. She could not confirm whether the draft had been returned from Legal Affairs or forwarded to Fiscal Affairs for review.
The Minister also reiterated that a financial transaction tax remains a proposal under examination and is not currently among the Ministry's immediate legislative priorities.
Development Bank and Central Bank Appointments
Labega had also questioned the need for another feasibility assessment concerning a proposed national development bank, given that the initiative has been discussed for several years.
Gumbs confirmed that the Social Economic Council conducted a St. Maarten-specific assessment in 2016, but those efforts did not result in the establishment of a development bank.
She explained that further work has been commissioned to develop a structured proposal and assess whether such an institution would be financially sustainable, what it would cost and whether alternative financing arrangements could better serve businesses and development projects.
The Minister emphasized that commissioning an assessment does not constitute a government decision to establish the institution. On the delayed appointments to the Supervisory Board of the Central Bank of Curaçao and St. Maarten, Gumbs acknowledged that the process had taken longer than anticipated.
She reported that discussions between the governments of St. Maarten and Curaçao during a June 2026 summit had produced progress on several governance matters. She also disclosed that security screening for St. Maarten's third candidate was completed on July 22, 2026. A follow-up meeting between the governments remains to be rescheduled.
Cft Loan Concerns and Capital Investments
Addressing Labega's questions about the Committee for Financial Supervision's (Cft) inability to issue positive advice on approximately Cg 42.1 million in proposed borrowing for 2026, Gumbs explained that projects dependent on that financing could not proceed without the required loan.
She maintained that capital investments must first be included in an approved national budget before government can formally pursue borrowing to finance them. The Minister further explained that the 2026 financing difficulty was linked to the late approval of that year's budget and the time required to complete the subsequent borrowing process.
According to Gumbs, the earlier budget approval schedule left insufficient time for the necessary financing arrangements to be completed within 2026. She said the 2027 budget is now being debated before the start of the financial year, removing the particular timing difficulty encountered in 2026.
However, she cautioned that this does not guarantee approval or availability of the financing requested for 2027, which remains subject to the applicable assessment and approval procedures.
Finance Ministry Spending Explained
Gumbs also responded to Labega's questions concerning a Cg 60,000 marketing and communications allocation in the 2027 budget and an increase of approximately Cg 1.3 million in advisory-related expenditure.
She explained that the communications allocation is intended to inform the public about government policies, programs, legislative changes and tax services.
The increase in advisory expenditure, according to the Minister, is primarily associated with externally financed initiatives, including the Tax Administration Transformation Project and the Future of Government Finance Project. These projects include measures intended to improve tax compliance and government financial administration.
