Last week’s meeting of St. Maarten Hospitality and Trade Association (SHTA) with local realtors (see Friday/Saturday edition) was noteworthy. They discussed the growing use of Airbnb, vacation rentals by owners (VRBO) home and away, and private home individual rentals.
As correctly pointed out, a rapid rise of short-term vacation rentals has brought opportunities and challenges worldwide. One of these for St. Maarten is that in most cases very little – if any – tax is paid on these business transactions.
Getting a better idea of the size and impact of the industry locally indeed seems important, but one can safely assume it’s sizeable. That also means the national treasury has been missing out on considerable potential earnings.
SHTA said it supports recent efforts by Finance Minister Ardwell Irion to tackle this issue, also to level the playing field with more traditional visitor accommodation companies that do meet their collective duties towards society. However, few appear to know – or are willing to say – exactly what the plan is.
The country’s 2023 budget projected income went up 5.8% from last year based on, among other things, expected economic growth, enhancing fiscal compliance and taxing home-sharing activities. The latter should generate 5 million Netherlands Antillean guilders, while a “special tourist tax” that will supposedly produce NAf. 10 million is mentioned too.
Minister of Tourism, Economic Affairs, Transport and Telecommunication (TEATT) Leo Lambriex for his part listed NAf. 3.14 million in timeshare tax, NAf. 8 million in guest lodging tax, NAf. 5 million in Airbnb tax and NAf. 10 million from the special income tourism tax.
There was never a proper and convincing explanation why simple revenue-collecting agreements with Airbnb and well-known similar agencies like many other destinations have could not be reached so far. Of course, that would cover only part of the sector and thus not solve the entire problem, but it could be a good start as more complex aspects are dealt with in a responsible way.
It’s matter of first going after low-hanging fruit.
