Minister of Finance Delivers on Commitment: Temporary Expansion of Income Tax Payment Arrangements from 9 to 24 Months
Philipsburg — Pending the implementation of the ongoing tax reform, taxpayers will now have the opportunity to settle their outstanding income taxes through a payment arrangement with a standard period of 24 months, once the assessment has been determined, instead of the maximum period of 9 months currently being applied. This was announced by the Honorable Minister of Finance Marinka Gumbs.
The new flexible approach is guided by the theme, “Stabilize, Repair, Reform: A Phased Approach to Tax Reform and System Renewal.” It applies exclusively to individual taxpayers and relates solely to outstanding income tax assessments. It does not apply to businesses, corporate taxpayers, or any other types of taxes, including, wage tax, turnover tax, nor profit tax. The measure is intended to better reflect the economic realities and payment capacity of individuals and households in Sint Maarten.
According to the Minister, this temporary approach will be in effect until December 31, 2026. Separate and targeted measures to address concerns within the business community are currently being developed and will be made public at a later date.
“I want to emphasize that I fully support strong and joint compliance efforts to ensure that taxes are paid and that the tax system functions effectively,” Minister Marinka Gumbs stated. “However, at the same time, it is clear that existing collection measures need to be modernized to better reflect current economic realities and taxpayers’ ability to pay.”
“These two objectives,” she went on, “go hand in hand: maintaining compliance while ensuring that collection practices are fair, reasonable, and workable in today’s context.”
The Receiver, she stressed, will continue to collect outstanding taxes in accordance with existing laws. The Receiver cannot waive or reduce tax debts but may grant deferrals of payment where appropriate for individual income taxpayers.
“I acknowledge that due to limitations in existing procedures and systems, the Receiver is currently unable to effectuate automatic tax refunds,” the Minister stated. “Furthermore, delays in the annual tax process have resulted in individual taxpayers sometimes receiving multiple years of assessments within a single calendar year, leading to unexpected and cumulative payment obligations that are difficult to meet within a short period.”
The Minister recognized that this situation has contributed to significant financial stress for many households, particularly when taking into consideration the damaging effects of the hurricanes, the COVID-19 pandemic, and the ongoing financial burdens faced by families, including high cost of living, rising utility costs and the challenges surrounding GEBE. She noted that these cumulative pressures have affected the payment capacity of many individual taxpayers and must be acknowledged in shaping a fair and realistic collection approach.
“While it is true that it is the responsibility of each citizen to file and pay their taxes in a timely manner, it is also evident that the current collection ordinances are outdated and no longer fully reflect the present fiscal and economic circumstances of Sint Maarten,” she noted.
Under current practice, the Receiver applies a maximum deferral term of nine months without requiring a payment capacity test. Where such a test is required, it is based on a DB 35 form that assesses income, expenditures, and assets. Feedback from individual taxpayers gathered during the Minister’s Finance Friday engagements indicates that the nine-month term is often too short, that the DB 35 process is perceived as administratively burdensome, and that some taxpayers have entered into agreements they knew in advance they could not realistically meet.
This is why the Minister has introduced this temporary approach, effective until December 31, 2026, allowing individual income taxpayers who request a payment arrangement to be granted payment terms of up to 24 months without the requirement to submit a DB 35 payment capacity test. Taxpayers who prefer a shorter payment period may also request this.
In addition, the Minister noted that this temporary adjustment will also allow the hard working Collection Officers to deploy its limited collection capacity more effectively. By providing realistic payment terms to individual taxpayers who are willing to comply, the Receiver and collection staff can focus their enforcement efforts on cases of non-compliance and deliberate non-payment. This targeted approach strengthens overall compliance while reducing unnecessary administrative pressure on both taxpayers and tax employees.
While the Tax Administration continues working toward implementation of a new integrated tax IT system and modernization of its processes, the Minister considers it appropriate to temporarily apply a more realistic, understanding, and humane approach to payment arrangements for individual income taxpayers.
In the interest of transparency and good governance, the Minister also confirmed that the adjusted collection policy will be formally documented and published. Clear publication of the applicable rules and conditions ensures that taxpayers understand their rights and obligations, promotes equal treatment, and strengthens public trust in the administration of the tax system.
“The intention is to reduce hardship, limit the need for coercive measures such as summons, liens, attachments and auctions, and promote voluntary compliance by taxpayers who are willing to pay but require more reasonable timelines to do so,” Minister Marinka Gumbs concluded.
