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Explanatory Note on the lifting of Car Rental Moratorium

​The decision on the lifting of the moratorium on the Car Rentals was taken after months of analysis of the market and following several rounds of consultation and discussion between all involved departments. It was unanimously determined that the lifting was necessary and needed to better service the needs and to increase Government income. 

It all started with the astonishing facts that, regardless the study increase of the visitors through the years, cruise passengers and stay-over, the income from the 5% rental tax dictated by the Autoverhuurbelasting was decreasing since 2010. While Government provisioned a budgetary income per year of 1.2 million Guilders, the real income has been sturdily decreasing to a point where in 2012 only 1 million was collected and in 2013 980 thousands Guilders.

In addition to the decrease in that some car rental agencies do not pick-up all their R number plates according to the number of cars they have on their license. This is also a sign of less income generated by Government. 

This warrants a study and the Control department has been carrying multiple controls for the last few months. The findings of those controls were also striking as they determine few predominant facts.

One of the facts is the excessive use of the French number plates, while the law forbids such practice (Article 21, points 1 and 2 of the LANDSVERORDENING inzake het vervoer van personen met motorrijtuigen op de openbare weg tegen vergoeding). It is a known fact that most if not all car rentals on the Dutch side exaggeratedly practice the use of the French number plates in their fleet. In any event, this practice is an infringement of the law and the Control Department was diligently busy assessing the situation during the past three months. In those controls, all car rentals were informed about the number plate issue and were advised to remedy the situation as soon as possible and before the upcoming tourist season.

In the analysis of this industry what was also discovered is the fact that while the Department has close to 150 registered car rental licenses, the finding of how many of them are actually operating was and still a challenge for the Department to determine. The first figure reached to is around 50, among which many are limited to 1 or 2 cars. As such, according to the Receiver Office, only 2306 R number plates were picked up in 2014. Below is a short summary of the findings of the department thus far:

“Based on the most recent inventory conducted in August 2014 a total of 143 rental car permits have been issued. This represents a total of 6,853 total authorized motor vehicles that can be rented in the market based on the maximum allowed motor vehicles per permit. These permits date back to as far as 1979. We are currently working along with other government departments to determine how many of these permits are active. We have a total of 56 permit holders who collected rental car plates in 2014 thus far. We are using this as a starting point to assess how many are active. We estimate that about 59% of motor vehicles that can be rented have collected license plates for those motor vehicles. Of the rental car companies who have collected license plates in 2014 13 are authorized to have more than 100 vehicles. These 13 rental car companies are permitted according their rental car permit to have on average 200 motor vehicles and represent more than 65% of the potential plates that could be issued in 2014.”

While the Department is continuing the assessment and increasing the awareness campaign in preparation of the season, the publishing of the Moratorium Lifting may encourage the licence holders to be identified and properly recorded. This publication will also give the small ones to grab the opportunity and request an increase of their fleet.

It is noticeable that the lifting of the moratorium on fleet expansion, that was done on October 1, 2010 by the then Island Council and registered under the booking number 6546, did not give any results in the number of requests as very few have done so. We still do not know what is the reason behind and as such, we see it important to also include it this time around. This could be due to the fact that there was very little interest by the license holders, the excessive use of the French number plates or simply an oversight and poor communication.

The car rental industry in Sint Maarten is a very specific one as it has been developed fast with great level of neglect of the present laws and regulations. The complexity of the present situation, partly due to the misuse of our coexistence with the French side, has attracted the attention of the Ministry since the very beginning of the term. 

What did trigger the process was the multiple complaints received by the Tourist Bureau and the Ministry on the strange practices of many car rentals, especially when it comes to insurance and accidents issues. The car rental industry is vital in any touristic destination and must play a part in the sustainability of the economy and in the enhancement our Friendly Island image. 

The lifting of the moratorium is merely a drop in the bucket and the start of the determined process to educate, regulate and better control this vital industry for the sake of the economy and the consumers.

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