The government argues that the tax measures is along the lines of a shift among Caribbean governments toward a more strategic use of tourism taxes. While these levies increase travel costs modestly, they are designed to ensure that tourism-related revenues are reinvested into critical infrastructure and sustainability projects.
But the SHTA maintains that the proposal is “not optimal for achieving the objective of sustainably optimizing the economy” and could actually lead to reduced income for both the government and the 20,000 individuals employed in the private sector.
In a detailed response to questions posed by The Peoples’ Tribune, the association said while the proposed tax may appear modest, the SHTA maintains that in today’s competitive tourism market, any additional costs can affect travel decisions. Tourists already facing high airfares and accommodation prices may view the surcharge as unnecessary or even punitive, particularly longtime or repeat visitors. More importantly, the association warns that redirecting money away from the local economy and into direct taxation removes capital that could otherwise circulate through wages, local purchases, and small business operations.
First, The Caribbean
Since 2024, a growing number of Caribbean destinations have implemented or adjusted tourist taxes as governments seek new ways to fund sustainability efforts, bolster infrastructure, and support the tourism industry’s long-term development. This wave of fiscal reform reflects a broader regional trend of using tourism levies as a tool to manage environmental impacts and strengthen public services in the face of increasing visitor numbers and global economic uncertainty.
In Aruba, a new sustainability fee came into effect on July 1, 2024. The island now charges a $20 fee for all air travelers aged eight and older. This charge is collected through the Embarkation and Disembarkation (ED) card system prior to arrival. The funds are earmarked for environmental initiatives, including upgrades to sewage and wastewater infrastructure, as Aruba seeks to protect its fragile ecosystem while maintaining its appeal as a top-tier tourism destination.
The Bahamas also introduced new and expanded taxes in 2024. The departure tax for passengers leaving Nassau and Freeport rose from $18 to $23. Additionally, travelers now pay a $5 tourism environmental tax and a $2 tourism enhancement tax. The government has stated that these revenues will go toward environmental protection programs and national tourism development efforts aimed at ensuring the industry’s resilience and sustainability across its many islands.
Barbados has modified its room tax structure by introducing a tiered Room Rate Levy in 2024. The levy ranges from BDS $5 to BDS $20 per night depending on the category of accommodation. Vacation rentals and villas are also subject to a 2.5 percent tax on the nightly rate, capped at BDS $20. The government of Barbados plans to use these funds to support national tourism marketing initiatives, upgrade airport facilities, and preserve the island’s cultural and heritage sites.
Jamaica followed suit by implementing a $20 Tourism Enhancement Fee for air arrivals in 2024. This tax is expected to help finance improvements in the country’s road networks, airports, and cultural landmarks. A portion of the revenue will also be dedicated to expanding Jamaica’s global marketing campaigns as the island seeks to reinforce its position as a premier Caribbean destination.
In Mexico, a phased tourist tax is set to begin on July 1, 2025. Cruise ship passengers will initially pay a $5 fee upon arrival. This charge will gradually increase over the next three years, reaching $10 in 2026, $15 in 2027, and eventually $21 by August 2028. The collected funds will support national security initiatives and help improve port infrastructure in cruise destinations across the country.
The SHTA opposes
While acknowledging that the SHTA had some input through its representation in the Employer Council of Sint Maarten (ECSM), alongside the IMA, SMTA, and SMMTA, the organization stressed that their concerns remain unresolved. “You will find that the association fears that the system will lead to less sooner than more income for government, as well as the 20,000 St. Maarten people working in the private sector. The association suggests to do a complete overhaul in a holistic manner. There are many taxes on the books that are not being collected before we look at implementing new ones.”
The SHTA expressed concern that the tax will discourage arrivals and lower discretionary spending, ultimately reducing earnings for both the public and private sectors. “The SHTA is of the opinion that the proposed tax will have a negative effect on the economy,” they wrote. “Initiatives to counteract the negative effects are missing. We are worried that the tax will negatively impact the economy through reduced arrivals which would lead to less income and employment for residents and government.” The organization also noted that “various international organizations have also warned for this effect.”
Calling for evidence-based policymaking, the SHTA added that “thorough additional research should be done to properly answer your question. In times of global financial uncertainty this is a very dangerous thing to implement without proper data supporting it.” They confirmed that although they have reviewed a “mixed bag of studies/results,” jurisdictions that introduced similar taxes successfully had conditions that St. Maarten lacks—namely “robust tourism management structures” and existing tax frameworks where the industry paid “substantially lower rates.”
The SHTA also referenced global economic factors that must be considered, stating, “The effects of Trump Tariffs need to be taken into account when looking at any performance of other islands, or at that of St. Maarten,” further underscoring the need for deeper economic impact analysis before enacting such legislation.
Critically, the SHTA dismissed comparisons to Bonaire and Aruba. “In Bonaire the tax was implemented while other taxes like room tax and car rental tax were scrapped. Bonaire changed the dynamic of its tax system, and cannot be considered an example for this proposal, as government as far as we are aware does not plan to remove room tax like Bonaire.” Regarding Aruba, they noted that the island benefits from an advanced tourism authority. “Aruba has a very robust tourism management entity, spending 46 million USD on marketing in 2024 (more than 1100% that of St. Maarten). While their arrivals are down, their industry revenue is up substantially. In addition, revenues are earmarked for sustainability projects. Sint Maarten looks to only implement the tax, without having any arrangements to mitigate the possible negative effects.”
The SHTA reiterated its longstanding recommendation that St. Maarten establish a Tourism Authority similar to Aruba’s. “We see a properly functioning and funded Tourism Authority as the best possible tool for managing and optimizing the tourism industry specifically and our economy in general. It will lead to more income, more wages and more investment. That optimization will also create more revenue for the government.” They acknowledged that “some type of tourist industry tax may be required and that conversation needs to be had,” but argued that such a measure must be part of a broader, strategic, and transparent framework. “A functioning Aruban-model STA funded by earmarked income like on Aruba would be a good safeguard to if the now proposed tax doesn’t bear results.”
On the question of whether they trust the tax revenues will be effectively and transparently used for their stated purposes—strengthening public health and tourism—the SHTA responded: “If spending is not clearly outlined and defined, the answer is yes.” They noted that “the Audit Chamber regularly reports on financial management issues within the government. There is room for improvement. All taxpayers should be concerned about transparency, accuracy and effectiveness of government expenditure.”
The SHTA also took issue with the legislative process itself, stating that they were consulted during earlier discussions about folding the COVID insurance into a broader tax, but that no real stakeholder engagement has taken place since then. “There are rules how legislation needs to come into existence, the ‘Aanwijzingen voor de Regelgeving.’ There is a list of points that need to be considered. These considerations include a clear review of the problem, alternative solutions other than new legislation/regulation and stakeholder consultations for greater understanding before legislation is drafted.”
Instead of implementing a new tax, the SHTA urged the government to focus on fulfilling reform objectives tied to the Trust Fund and the COHO reform agenda. “Post Irma Sint Maarten received the Trust Fund administered via the World Bank / NRPB. During the Pandemic the COHO/TWO and the reform agenda were initiated. Both had the objective of making Sint Maarten more resilient and sustainable. SHTA feels strongly that effective reform is required before considering new taxes. Structural reforms will address inefficiencies.”
The SHTA confirmed that discussions are ongoing with the government on identifying revenue generation improvements and ways to level the playing field, but emphasized that “we need to address what isn’t working now.” The association indicated its willingness to collaborate on realistic solutions: “SHTA is always prepared to engage in the conversations on how to move our economy forward, sustainably and fairly.”
Acknowledging the country’s reliance on tourism, the association concluded with a call for balance. “For better or for worse we have a single pillar tourism economy. Income for businesses and households and government is highly dependent on tourists arriving and spending on Sint Maarten. To improve that fairly means that everyone needs to benefit. Sustainably means that we do it without harming our potential to generate these revenues in the future.” They warned that “government revenue generation cannot hamper the economy’s overall productivity and income-generating capacity,” and that a well-managed tourism sector and equitable fiscal policy are the keys to long-term success.
“We cannot grow government revenue if we don’t grow productivity,” the SHTA concluded. “A visitor’s tax is only a small part of that conversation.”
Source: The Peoples Tribune https://www.thepeoplestribunesxm.com
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