SINT MAARTEN (GREAT BAY) – With an eye towards assisting young academics who choose to return home after completing tertiary education, Member of Parliament (MP) Rolando Brison on Wednesday announced that a draft Graduate Head Start Tax Law is being prepared to finally give these students a fair chance at success upon returning to the island by placing them in a lower wage tax bracket.
The tax law is designed to put any returning graduates that can prove they have graduated from tertiary education within the last two years, an opportunity to qualify for the favorable wage tax rate for their first 4 years of employment in St. Maarten.
“Under the current taxes, anywhere from 24 to 47% of your income is deducted by wage taxes. So currently someone on a $2000 gross salary, only “takes home” roughly US $1400. The goal of the tax law amendment will allow for much more of the gross income to stay with the returning student, giving them much more spending power,” Brison said.
He added that under the new Head Start Tax Law, a gross salary of US $2000 would now take home closer to US $1800 per month (depending on social premiums, marital status etc). “That’s an extra US $400 a month in such a scenario. We are effectively giving every returning student a 30% pay raise,” he said.
Addressing the “how” questions, MP Brison explained that the general tax law will be amended to create a provision for the new Head Start Tax provision, clearly defining the requirements which would include having graduated within the last 2 years and being a maximum wage tax break of 4 years.
“We will amend the income tax law to reflect the relevant reduction for those who qualify. The financial impact will be justified in the law by means of the additional economic impact. For example, 400 returning students now spending 2000 a month locally that they otherwise would not have been spending is an additional 9.6 million a year in new economic activity, close to 1% of our GDP,” he said, adding that “we will have more of our own local expertise returning to contribute to our society in the workforce and business market.”
Brison explained that the idea for this incentive law stems from his own personal experience when coming back from the Netherlands. “For the first time going into the labor market at a Bachelors degree or a higher level, when I was told what my gross salary was I was mildly ok with it. But after when I saw my pay slip and saw the huge wage tax deductions I knew this was a problem. It puts returning students at a big disadvantage compared to if they were to stay in the Netherlands or in the US to work.”
The MP and Leader of the United People (UP) party said that in order to encourage students to come back to St. Maarten, not only should the burden be placed on businesses to pay local young academic more, but government must take the steps necessary to put them in a more favorable position to get them back home. “Give them incentives to come back. They really want to, but realities such as high wage taxes which makes starting out really difficult, is keeping them away. I would much rather have our students contributing something to our tax base while still successfully starting a life and a career, rather than not contributing to it at all by staying away and contributing to another country’s tax base,” the MP said.
As usual the MP assured that due diligence will be executed and he will be coming to the people of St. Maarten often to update the progress of the Graduate Head Start Tax Law.
Source: Souliga Newsday https://www.soualiganewsday.com/index.php?option=com-k2&view=item&id=28789:brison-graduate-head-start-tax-law-incentive-to-attract-students-back-home&Itemid=450
View comments
Hide comments