Friday, May 29th

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Editorial - A little boost

The increase in St. Martin’s income tax reduction rate for hotel renovations (see Monday paper) no doubt was welcomed by the hospitality industry. It’s no secret that the Northern part of the island has been facing difficult economic times and although there are some signs of recovery any kind of assistance remains very helpful.

Moreover, it reportedly concerns harmonising the local situation with that of similar Collectivités such as New Caledonia, Wallis-et-Futuna, St. Pierre-et-Miquelon, and French southern and Antarctic territories, so it’s not as though Marigot is receiving any special favours from Paris.

Nevertheless, the relief measure for investments in stay-over tourism could make a positive difference in the sense of product improvement to enhance the destination’s attractiveness. Sure, the hike is only 7.65 (from 38.25 to 45.90) per cent, but such a benefit can be considerable when it involves large amounts.

The news might prompt the Dutch side to consider whether some added incentive for expansions and remodelling at local resorts isn’t in order. That may seem like a really bad idea at first sight, given the already-experienced budgetary issues.

Due to the current financial constraints any proposal for a tax cut probably will be frowned on, but one has to look at the nature of the measure. After all, it regards only renovations, meaning that additional money is to be spent for the fiscal break even to kick in.

One would have to look at the number and size of these types of projects now taking place and being taxed. The important factor then would be how many more such a move would lead to.

The answer is obviously hard to predict, but sometimes a little boost can go a long way.