Fiscal Cannibalism: Why Doubling the Room Tax is a Recipe for Economic Contraction

The recent proposal by the Government of Sint Maarten to double the room tax from 5% to 10% is more than just bad math; it is a symptom of a government that refuses to look where the real money is. As a practitioner who has navigated our island’s financial maze for over three decades, I see this not as a solution for a cash-strapped budget, but as a desperate maneuver by a ship sailing without a rudder.

We are squeezing the legitimate tourist while being surrounded by unexplained, untaxed luxury. We do not have a revenue problem; we have a courage and competence problem.

1. The "Financial Ghost" Economy: Receipts on Scraps

To test the integrity of our local commerce, I have personally requested receipts at various establishments. In one instance, after spending over $100 at a major retail outlet, I was handed a small, unnumbered, non-duplicate slip of paper that simply read: "Clothing Items."

As an accountant, I recognize this for what it is: a financial ghost. Without serialized numbering or a carbon copy for internal administration, there is no audit trail. For all intents and purposes, these transactions never entered the national ledger. If $100+ purchases are treated with this fiscal casualness, the government is essentially operating on an "honor system" that is being widely ignored.

Why double the burden on tax-compliant hotels while allowing the retail sector to operate with unnumbered slips of paper?

2. The Institutional Blind Spot: Harbor and Casinos

Let us be brutally honest: if the "big" stakeholders—the large-scale supermarkets, the casinos, and the major hotels—were truly paying their fair share, Sint Maarten would not be in these dire straits.

• The Harbor: We are a duty-free port, but "duty-free" should not mean "oversight-free." Who verifies that the "toilet paper" on a bill of lading isn't actually high-value luxury merchandise?
• The Casinos: We have government controllers who appear to be doing little more than "hanging around." Without forensic, daily audits of casino intake, we are leaving the door wide open for under-reporting.

A ship without a rudder cannot be saved by simply asking the passengers to pay for more fuel.

3. The Real Estate Mirage and Unexplained Wealth

Look around our hillsides. Multi-million dollar villas are rising like monuments to a prosperity that the government’s budget fails to reflect. Many of these projects are "fiscal islands"—built with imported labor and materials, contributing almost nothing to the local "multiplier effect."

Most troubling is the presence of prominent individuals maintaining estates that their declared incomes could not possibly support. In any functioning society, these discrepancies would trigger an audit; here, they seem to trigger a promotion. We have a massive "leakage" of wealth that bypasses the treasury entirely.

4. An Actionable Path to Integrity

Before asking for another cent from the tourism sector, the government must show the courage to implement real structural reform:

• Mandatory Fiscal Integration: Require cloud-synced POS systems for all businesses to end the "cash box" era.
• Civil Service Audit: Freeze political hires and align the salaries of MPs and Ministers with the economic reality of our people.
• Forensic Oversight: Shift casino controllers from the door to the ledger, and perform physical audits on harbor manifests.

Increasing taxes on a bleeding economy is not leadership; it is a failure of imagination. It is time we stop "maneuvering the maze" and start building a straight path toward fiscal integrity.

#SintMaarten #FiscalIntegrity #TaxReform #EconomicJustice #DrCliffordIllis #TourismEconomy #Accountability