Video 5 Dividend Tax COLA Payments on the Horizon – What Public Workers Can Expect
Demystifying Dividend Tax – What It Is and Who It Targets
In a recent Council of Ministers press briefing, the Minister of Finance offered clarity on the proposed dividend withholding tax.
Video 5 Dividend Tax COLA Payments on the Horizon – What Public Workers Can Expect
Many residents and business owners have misunderstood its intent.
However, the minister emphasized that local businesses and residents will not bear the brunt of this tax. Instead, the target is clear:
foreign shareholders profiting from businesses operating in St. Maarten without contributing their fair share to the national treasury.
To illustrate this, the minister shared a fictitious example.
Video 5 Dividend Tax COLA Payments on the Horizon – What Public Workers Can Expect
Suppose a company declares $5,000 in dividends. Under the new law,
10%—or $500—would be withheld and sent directly to the tax office.
Later, when filing income tax, the shareholder would report the $5,000 as income.
Assuming a tax rate of around 16%, their total liability would be $937.
Because they already paid $500 through the dividend tax, they’d only owe $437 more.
Video 5 Dividend Tax COLA Payments on the Horizon – What Public Workers Can Expect
Local shareholders benefit from this system. They can apply the withholding tax as a credit, reducing their income tax burden.
On the other hand, foreign investors, who historically have not contributed through wage or profit tax, will now do so via the dividend tax.
Moreover, the minister connected this initiative to a broader vision.
By generating more revenue from external sources, the government hopes to eventually reduce wage and profit taxes for locals.
Video 5 Dividend Tax COLA Payments on the Horizon – What Public Workers Can Expect
“We can’t have champagne dreams on a bare budget,” she stressed, adding that revenue must match ambitions for better education, infrastructure, and healthcare.
In short, the dividend tax aligns with the principle of fairness—everyone benefiting from the economy must contribute to it.
Local businesses remain protected, while foreign investors are called to share in the responsibility.
COLA Payments on the Horizon – What Public Workers Can Expect
During the fourth round of questioning in the Council of Ministers press briefing,
the topic of Cost of Living Adjustments (COLA) for civil servants took center stage.
The Minister of Finance confirmed that public workers will soon receive their long-awaited COLA payments,
with detailed timelines provided for transparency.
According to the minister, a 2% indexation will be applied and paid retroactively for the months of January through May.
That total sum will be disbursed in July.
Meanwhile, in June, public employees will already see what their adjusted COLA amount will look like on their pay statements,
even if the actual disbursement comes a month later.
Additionally, there’s a 1% separate component to the COLA, which the Ministry is also finalizing.
While the 2% portion appears set for payout, the minister did not specify the exact date for the remaining 1%,
though she confirmed it’s in process.
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This update comes shortly after the payment of vacation allowances, which left many wondering why COLA hadn’t followed.
While some workers believed the funds were already included,
the Minister clarified that COLA is distinct from vacation pay and will be handled as a separate transaction.
The Minister acknowledged that delays can cause frustration,
but she emphasized that preparations are well underway and employees can expect payment soon.
This transparency reflects the government’s intent to restore trust and fulfill obligations, even amid tight fiscal conditions.
In summary, COLA is not just a number—it’s a recognition of rising living costs and the need to support public servants fairly.
The government is moving forward, and July marks a concrete step in honoring its commitments.