Doran criticizes government’s dividend tax proposal as poorly timed and lacking transparency

Member of Parliament Egbert J. Doran has voiced reservations regarding the government’s proposed introduction of a 10 percent dividend withholding tax, scheduled to take effect on January 1, 2026. Doran argues that the measure is ill-timed and does not reflect the economic and social realities currently facing the people of St. Maarten.

Referencing the lasting impacts of Hurricane Irma, the economic fallout from the COVID-19 pandemic, and the absence of tax relief measures for residents, Doran contends that the introduction of an additional tax burden at this stage is inappropriate.

According to the MP, the decision, announced by the Minister of Finance as part of the upcoming 2026 national budget, has been advanced without adequate consultation or formal communication with affected stakeholders, including local businesses and shareholders. He emphasized that any change of this magnitude, particularly one with direct implications for small businesses and family-owned enterprises, requires open dialogue and proper legislative procedure.

“What is most concerning,” Doran said, “is that the government is pursuing revenue increases without offering any relief measures in parallel.” He noted that there is no overarching tax policy, no roadmap for reducing living costs, no adjustments to fuel taxes, and no concrete incentives to encourage investment or economic growth. Instead, he pointed out, a dividend tax has been prioritized, potentially raising the effective tax burden on distributed profits from 34.5 percent to more than 43 percent, without any exemption policies or reinvestment incentives being outlined.

Doran also raised governance concerns about the manner in which the tax proposal is being handled. He criticized the lack of a published legislative framework, explanatory documentation, or stakeholder engagement, suggesting that the process appears rushed and lacking strategic coordination. With less than seven months before the proposed implementation, Doran questioned how businesses are expected to prepare for such a fundamental fiscal change without clear guidance.

“The government’s approach increasingly appears to lack a coherent economic or fiscal relief strategy,” Doran said. “Residents and businesses are being asked to bear more financial pressure, yet there is no indication of reciprocal measures to stimulate growth or ease operational challenges.” He added that there is currently no investment strategy to support job creation, no administrative relief for entrepreneurs, and no indication of how the proposed tax fits within broader reform objectives.

MP Doran concluded by stating that he will be requesting further explanation from the Minister of Finance during the upcoming public budget debate, seeking clarity on both the rationale for the tax and the process by which it is being introduced.

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