Wage tax exemption for
minimum wage earners
WILLEMSTAD--Parliament is preparing an initiative draft law exempting minimum wage earners from paying wage tax as of January 1, 2008. The initiative draft law has been co-signed by Democratic Party (DP) member of Parliament Maria Buncamper-Molanus, amongst others.
The law will also regulate a 15 per cent minimum wage increase for Curaçao, Bonaire, Saba and St. Eustatius. When the law is passed, it will be up to the island territories when they will let the minimum wage increase go into effect, which can be as soon as the beginning of the month following the date on which the law is passed by Parliament.
This minimum wage increase will not apply to St. Maarten because the island already increased its minimum wage in November 2006. However, the exemption from wage tax will apply to St. Maarten and will mean a loss of income for the Island Territory of more than NAf. 700,000.
Buncamper-Molanus said she had consulted on the initiative draft law with Finance Commissioner Sarah Wescot-Williams, who indicated that the law should be sent first to St. Maarten for review, as it will have financial implications for the island territory. “Politically DP supports the law, as it increases the spending power of minimum wage earners,” Buncamper-Molannus said.
“St. Maarten is a service industry island, so it’s a good thing to spread the tax burden. Everyone who comes to the island has to pay his share of taxes for using our services, making it possible to increase spending power of the lower income earners,” she said.
She said more spending power meant that Government, while losing income on direct taxes, would receive more income in indirect taxes. The change in law, according to the Parliamentarian, fits also into the strategy that is being applied to overhaul the tax regime in St. Maarten. It also fits into the constitutional change process with St. Maarten seeking to obtain country status, Buncamper-Molanus stated.
St Maarten vacation rental
